This article first appeared on GuruFocus .
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Revenue:$3.7 billion for the quarter.
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Volume Growth:2% on an RTM basis.
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Operating Ratio:63%.
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Earnings Per Share (EPS):$1.04.
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Freight Revenue:Down 3% on a 2% RTM growth.
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Grain Revenue:Up 14% with 12% volume growth.
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Potash Revenue:Down 2% on 2% volume growth.
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Coal Revenue:Down 11% on a 10% reduction in volumes.
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Energy, Chemicals, and Plastics Revenue:Declined 5%.
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Forest Products Revenue:Declined 14% on a 10% decline in volumes.
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Automotive Revenue:Down 6% with 2% volume growth.
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Intermodal Revenue:Down 1% on 3% volume growth.
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Cash Flow:Strong cash flow generation with $680 million deployed through share repurchases in the quarter.
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Dividend Increase:17.5% increase to the quarterly dividend.
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Capital Expenditure:Full year CapEx expected at $2.65 billion, a 15% reduction year-over-year.
Release Date: April 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Canadian Pacific Kansas City Ltd ( NYSE:CP ) reported strong revenue of $3.7 billion with a 2% volume growth on an RTM basis.
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The company achieved a record quarter for grain shipments, supported by a record harvest and efficient network connections across North America.
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CP announced a new share buyback program to repurchase up to 45 million shares, reflecting strong cash flow and a robust balance sheet.
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The company reached long-term tentative agreements with key labor unions, enhancing operational stability and improving quality of life for employees.
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CP increased its quarterly dividend by 17.5%, demonstrating a commitment to returning cash to shareholders amidst a volatile market.
Negative Points
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The company faced headwinds from volatile fuel and foreign exchange markets, impacting yields in the first quarter.
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Train accident frequency increased year-over-year, although it followed an all-time record low in Q1 of 2025.
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Coal revenue declined due to unexpected production-related issues at customer mines, impacting shipments and reducing Q1 RTMs by over 1%.
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The merchandise business saw declines in Energy, Chemicals, and Plastics revenue due to lower refined fuel volumes and a plastics plant closure.
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Forest Products revenue declined due to tariffs on Canadian lumber exports to the US and broader macroeconomic softness in housing and pulp and paper markets.
Q & A Highlights
Q: What are the expectations for volume growth for the rest of the year, and how does the pipeline look? A: John Brooks, Executive Vice President and Chief Marketing Officer, explained that while Q1 started slow, there was strong demand in February and March. He expects strong growth in Canadian and US grain, potash, and automotive sectors. The SMX product is anticipated to drive growth in the second half of the year, particularly with the CSX partnership.
Q: How does the company plan to achieve double-digit EPS growth in Q2 and beyond? A: Nadeem Velani, Chief Financial Officer, stated that Q1 was according to plan despite currency and fuel headwinds. He expects these headwinds to dissipate, with fuel becoming a tailwind. April is expected to be a record month, and the company is confident in achieving strong double-digit EPS growth in Q2 and the second half of the year.
Q: What is the outlook for the coal business, and how might it impact the year's performance? A: John Brooks noted that the coal business faced challenges in Q1 and is expected to continue struggling through Q2. However, there is optimism for improvement in the second half of the year, although the lost opportunity in the first half will be hard to make up.
Q: What are the company's views on the potential merger between UP and NS, and how might it impact the industry? A: Keith Creel, President and CEO, expressed strong opposition to the merger, citing risks to the industry and the nation's rail network. He emphasized the importance of maintaining a robust and efficient rail network and believes further consolidation is unnecessary.
Q: How is the company addressing truck-to-rail conversion opportunities, and what impact might this have? A: John Brooks highlighted the success of the SMX product and the partnership with CSX in driving truck-to-rail conversions. He noted that higher fuel prices and regulatory changes are creating opportunities for rail to capture more market share from trucks.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
