CPKC (NYSE: CP) set a second-quarter revenue record and saw operating income rise 10%, driven by strong grain, automotive, and energy-related shipments, according to the railway’s earnings call Wednesday. Revenue grew 13% to $3 billion, and adjusted earnings per share increased 13% to $0.91. Operating income reached $1.06 billion, up 10%.
Financial Highlights
| Metric | Q2 2026 | Year-Over-Year Change |
|---|---|---|
| Revenue | $3.0 billion | +13% |
| Operating Income | $1.06 billion | +10% |
| Adjusted EPS | $0.91 | +13% |
| Operating Ratio | 64.6% | +0.9 points |
| Operating Expenses | — | +14% |
| Fuel Costs | — | +53% |
Volume, measured by revenue ton-miles (CPKC’s preferred metric), increased 4%, but was flat when measured by carloads and containers. The railway’s operating ratio worsened by 0.9 points to 64.6% as operating expenses rose 14% and fuel costs surged 53%.
Operating Performance
Chief Executive Keith Creel said the results “reflect the strength of the CPKC franchise, the resilience of our business mix, and the continued benefits of uniquely connecting Canada, U.S., and Mexico.”
Key operating metrics improved markedly from a year ago, when the railway was dealing with congestion on former Kansas City Southern territory after a computer system cutover. Average train speed increased 7%, and terminal dwell improved 16%. Chief Operating Officer Mark Redd noted that the railway set second-quarter records for average train speed, dwell, locomotive productivity, and fuel efficiency.
Operating Metrics
| Metric | Change vs. Year Ago |
|---|---|
| Average Train Speed | +7% |
| Terminal Dwell | -16% |
| Employee Injury Rate | +32% |
| Train Accident Rate | +3% |
On safety, Redd said: “While we are disappointed by these results, we remain fully committed to continuous improvement. Safety is a journey that requires constant diligence, learning, and engagement. We’re taking action to address the underlying trends and remain focused on ensuring every employee returns home safe.”
Commodity and Segment Details
Chief Marketing Officer John Brooks reported that Canadian grain volumes rose 24% thanks to a record harvest and continued growth in shipments to Mexico. U.S. grain volumes increased 14%, driven by strong demand in Mexico and exports via the Pacific Northwest.
Coal volume declined 29% due to production challenges at southern British Columbia mines. Brooks said the decline reduced CPKC’s overall revenue growth by 3% during the quarter. Coal production is recovering, but volumes will remain challenged for the rest of the year.
Despite high U.S. interest rates and lower housing starts, CPKC had a record June for lumber shipments. Steel volumes improved in both domestic and land-bridge lanes linking Canada and Mexico.
In intermodal, domestic volumes increased 3%. The cross-border SMX interline service linking Mexico and Texas with terminals on CSX (NASDAQ: CSX) saw volumes rise 30% compared to the first quarter, when dedicated stack trains were launched using the new interchange at Myrtlewood, Ala., on the former Meridian & Bigbee short line.
Brooks noted “signs of improving truck to rail conversion opportunities supported by higher fuel prices, tighter regulatory enforcement, and reduced trucking capacity.”
Fleet and Capital
CPKC has received all 70 Wabtec ET44AC locomotives scheduled for delivery this year and will soon receive the first units of its order for 65 EMD SD70ACe-T4s from Progress Rail, Redd said.
Outlook
The railway continues to navigate headwinds from coal production challenges and elevated fuel costs, but strong grain, automotive, and energy volumes support momentum. CPKC’s unique tri-national network connecting Canada, the U.S., and Mexico remains a competitive advantage, according to management.
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