Canadian Pacific Kansas City (CP) Q3 2026 earnings summary

Executive summary

• Q3 revenue rose 15% YoY to $4.219B; revenue ton-miles increased 6% to 57,505M, while core adjusted diluted EPS rose 16% to $1.28.

• Reported diluted EPS was $1.04; reported operating ratio was 64.8%, up 130 bps, and core adjusted operating ratio was 61.9%, up 120 bps.

• Strong service, growth in grain and intermodal, and a robust commercial pipeline supported management’s confidence in meeting 2026 commitments.

Financial highlights

• Operating income increased 11% to $1.487B; core adjusted operating income rose to $1.608B from $1.440B.

• Net income attributable to controlling shareholders was $917M versus $920M a year earlier; core adjusted income increased to $1.119B from $999M.

• Operating expenses rose 18% to $2.732B; fuel expense increased 61% to $667M, with higher fuel prices weighing 170 bps on reported OR and 190 bps on core adjusted OR.

• 9M operating cash flow increased 12% to $4.252B; adjusted free cash was $2.359B, up 59%.

• 9M revenue rose 8% to $12.084B and core adjusted diluted EPS was $3.57 versus $3.28; net income attributable to controlling shareholders fell 9% to $2.787B.

Outlook and guidance

• 2026 guidance calls for low-double-digit core adjusted diluted EPS growth versus 2025 core adjusted EPS of $4.61, and mid-single-digit RTM growth.

• Full-year capital expenditures are expected to be ~$2.65B; the core adjusted effective tax rate is expected to be 24.75%.

• Q4 core operating ratio is expected below 60%; full-year volume growth remains on track at mid-single digits, with grain growth expected through year-end and into early 2027.

• 2024–2028 targets include high-single-digit revenue growth, double-digit core adjusted EPS growth, annual capex of $2.6B–$2.8B, ~90% adjusted free cash conversion and a return to double-digit core adjusted ROIC.