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Canadian Pacific Stock Declines 0.8% Since Q2 Earnings Release

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Key Takeaways

  • {\"0\":\"CP\'s Q2 EPS of 81 cents and $2.67B revenues missed estimates, though both rose year over year.\",\"1\":\"Freight revenues rose 2.7%, led by Grain and Intermodal, but key segments like Automotive declined sharply.\",\"2\":\"CP now expects 2025 EPS growth of 10-14% amid tariff and trade policy uncertainty.\"}

Canadian Pacific Kansas City Limited (CP - Free Report) reported unimpressive second-quarter 2025 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.

The company’s shares have declined 0.8% since the second-quarter 2025 earnings release.

The quarterly earnings (excluding 15 cents from non-recurring items) of 81 cents per share missed the Zacks Consensus Estimate by 1.2%. The bottom line improved 5.2% on a year-over-year basis. Operating revenues of $2.67 billion lagged the Zacks Consensus Estimate by 4.3%. However, the top line improved 1.5% on a year-over-year basis.

In the reported quarter, total Freight revenues per revenue ton miles decreased 4% year over year. Total Freight revenues per carload declined 3% year over year.

On a reported basis, operating income increased 6%. Total operating expenses grew 0.9% year over year. The reported operating ratio (operating expenses as a percentage of revenues) fell 110 basis points to 63.7% from 64.8% in the year-ago quarter.

CP’s Segmental Highlights

Freight revenues, accounting for 98.1% of the top line, increased 2.7%. CP’s Freight segment contains Grain (up 12%), Coal (up 8%), Potash (down 7%), Energy, chemicals and plastics (up 2%), Metals, minerals and consumer products (down 20%), Automotive (down 28%) and Intermodal (up 9%). Meanwhile, Fertilizers and Sulphur, and Forest products fell 5% and 8%, respectively.

Other revenues increased 1.3% year over year in the second quarter of 2025.

CP’s Liquidity

CP exited the second quarter with cash and cash equivalents of C$799 million compared with C$739 million at the end of the December-end quarter of 2024. Long-term debt amounted to C$21.23 billion compared with C$19.8 billion at the end of the fourth quarter of 2024.

CP’s Outlook

Despite the ongoing tariff and trade policy uncertainty, Canadian Pacific Kansas City now expects 2025 core adjusted combined diluted earnings per share to grow in the 10-14% range from the 2024 actuals to C$4.25 per share.

The company continues to expect 2025 RTMs to increase in the mid-single digits from the 2024 actuals.

Management expects capital expenditures to be C$2.9 billion for the full year. The core adjusted effective tax rate for 2025 is expected to be 24.5%.

Currently, CP carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Q2 Performances of Other Transportation Companies

Delta Air Lines (DAL - Free Report) reported second-quarter 2025 earnings (excluding $1.17 per share from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. However, earnings decreased 11% on a year-over-year basis due to high labor costs.

Revenues in the June-end quarter were $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion and decreasing marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion. 

J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported second-quarter 2025 earnings of $1.31 per share, which missed the Zacks Consensus Estimate of $1.34 and declined 0.8% year over year.

Total operating revenues of $2.93 billion lagged the Zacks Consensus Estimate of $2.94 billion and were flat year over year. JBHT’s second-quarter revenue performance witnessed a 6% increase in Intermodal (“JBI”) loads, a 13% rise in Truckload (“JBT”) loads, a 3% increase in Dedicated Contract Services (“DCS”) productivity and a 6% jump in Integrated Capacity Solutions (“ICS”) revenue per load. These items were offset by Final Mile Services revenue declining 10%, lower revenue per load in both JBI and JBT, a 9% decrease in ICS load volume and a 3% decline in average trucks in DCS. Total operating revenues, excluding fuel surcharge revenues, increased 1% on a year-over-year basis.

United Airlines Holdings, Inc. (UAL - Free Report) reported mixed second-quarter 2025 results, wherein the company’s earnings beat the Zacks Consensus Estimate, but revenues missed the same.

UAL's second-quarter 2025 adjusted earnings per share of $3.87 surpassed the Zacks Consensus Estimate by a penny but declined 6.5% on a year-over-year basis. The reported figure lies within the guided range of $3.25-$4.25.

Operating revenues of $15.2 billion fell short of the Zacks Consensus Estimate of $15.4 billion but increased 1.7% year over year. Passenger revenues (which accounted for 90.8% of the top line) rose 1.1% year over year to $13.8 billion. UAL flights transported 46,186 passengers in the second quarter, up 4.1% year over year.

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