CP

A month has gone by since the last earnings report for Canadian Pacific Kansas City (CP). Shares have added about 6.5% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Canadian Pacific Kansas City due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Canadian Pacific Kansas City Limited before we dive into how investors and analysts have reacted as of late. Canadian Pacific Kansas City Limited reported better-than-expected second-quarter 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. However, the company’s stock has declined 2.6% since its earnings release on July 29, 2026. Quarterly earnings of 92 cents per share beat the Zacks Consensus Estimate of 89 cents by 3.4%. The bottom line increased 13% year over year on a core adjusted basis. Operating revenues of $3.01 billion surpassed the consensus estimate of $2.91 billion by 3.3%. In Canadian dollars, revenues increased 13% year over year to C$4.16 billion. In the reported quarter, total freight revenues per revenue ton-mile increased 9% year over year. Total freight revenues per carload rose 12%, reflecting favorable pricing and business mix. On a reported basis, operating income increased 10% year over year to C$1.47 billion. However, total operating expenses rose 14% to C$2.69 billion, mainly due to a 53% increase in fuel expenses. The reported operating ratio deteriorated 90 basis points to 64.6%, while the core adjusted operating ratio worsened by the same magnitude to 61.6%. Volumes, measured in revenue ton-miles, increased 4% year over year to 57.58 billion. Average train speed improved 7%, while average terminal dwell declined 16%, indicating stronger network efficiency. Freight revenues, which accounted for 98% of the top line, increased 13% year over year to C$4.09 billion. CP’s freight business comprises Grain (up 24%), Coal (down 18%), Potash (up 10%), Fertilizers and Sulphur (up 12%), Forest Products (up 2%), Energy, Chemicals and Plastics (up 9%), Metals, Minerals and Consumer Products (up 18%), Automotive (up 22%) and Intermodal (up 11%). Grain benefited from a record Canadian harvest and strong U.S. export demand. Automotive revenues gained from new business wins, while domestic intermodal benefited from the company’s SMX service and improving truck-to-rail conversion opportunities. Coal remained the primary weak spot due to lower mine production and shipment volumes. Non-freight revenues increased 8.6% year over year to C$76 million in the second quarter. Canadian Pacific exited the second quarter with cash and cash equivalents of C$366 million compared with C$409 million at the prior-quarter end. Long-term debt amounted to C$22.25 billion compared with C$21.88 billion at the prior-quarter end. Net cash provided by operating activities increased 27.4% year over year to C$1.73 billion during the second quarter. Capital expenditures totaled C$758 million compared with C$743 million in the year-ago period. During the first six months of 2026, the company returned C$2.37 billion to shareholders through share repurchases and dividends, up 11% year over year. Canadian Pacific continues to expect 2026 core adjusted earnings per share (EPS) to grow in the low double digits from the 2025 level of C$4.61. The company expects 2026 revenue ton-miles to increase in the mid-single digits from the 2025 actual. Management continues to anticipate capital expenditures of approximately C$2.65 billion for 2026, representing a roughly 15% decline from 2025. The core adjusted effective tax rate is expected to be approximately 24.75%. CPKC expects improving freight fundamentals, commercial wins, integration benefits and disciplined cost control to support accelerated volume and earnings growth in the second half of 2026. It turns out, estimates revision have trended upward during the past month. Currently, Canadian Pacific Kansas City has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a score of F on the value side, putting it in the bottom 20% quintile for value investors. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Canadian Pacific Kansas City has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Canadian Pacific Kansas City belongs to the Zacks Transportation - Rail industry. Another stock from the same industry, Union Pacific (UNP), has gained 6.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Union Pacific reported revenues of $6.86 billion in the last reported quarter, representing a year-over-year change of +11.5%. EPS of $3.41 for the same period compares with $3.03 a year ago. For the current quarter, Union Pacific is expected to post earnings of $3.43 per share, indicating a change of +11.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.9% over the last 30 days. Union Pacific has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Canadian Pacific Kansas City Limited (CP) : Free Stock Analysis Report Union Pacific Corporation (UNP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Canadian Pacific Kansas City Limited CP reported better-than-expected second-quarter 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. However, the company’s stock has declined 2.6% since its earnings release on July 29, 2026. Quarterly earnings of 92 cents per share beat the Zacks Consensus Estimate of 89 cents by 3.4%. The bottom line increased 13% year over year on a core adjusted basis. Operating revenues of $3.01 billion surpassed the consensus estimate of $2.91 billion by 3.3%. In Canadian dollars, revenues increased 13% year over year to C$4.16 billion. Canadian Pacific Kansas City Limited price-consensus-eps-surprise-chart | Canadian Pacific Kansas City Limited Quote In the reported quarter, total freight revenues per revenue ton-mile increased 9% year over year. Total freight revenues per carload rose 12%, reflecting favorable pricing and business mix. On a reported basis, operating income increased 10% year over year to C$1.47 billion. However, total operating expenses rose 14% to C$2.69 billion, mainly due to a 53% increase in fuel expenses. The reported operating ratio deteriorated 90 basis points to 64.6%, while the core adjusted operating ratio worsened by the same magnitude to 61.6%. Volumes, measured in revenue ton-miles, increased 4% year over year to 57.58 billion. Average train speed improved 7%, while average terminal dwell declined 16%, indicating stronger network efficiency. Freight revenues, which accounted for 98% of the top line, increased 13% year over year to C$4.09 billion. CP’s freight business comprises Grain (up 24%), Coal (down 18%), Potash (up 10%), Fertilizers and Sulphur (up 12%), Forest Products (up 2%), Energy, Chemicals and Plastics (up 9%), Metals, Minerals and Consumer Products (up 18%), Automotive (up 22%) and Intermodal (up 11%). Grain benefited from a record Canadian harvest and strong U.S. export demand. Automotive revenues gained from new business wins, while domestic intermodal benefited from the company’s SMX service and improving truck-to-rail conversion opportunities. Coal remained the primary weak spot due to lower mine production and shipment volumes. Non-freight revenues increased 8.6% year over year to C$76 million in the second quarter. Canadian Pacific exited the second quarter with cash and cash equivalents of C$366 million compared with C$409 million at the prior-quarter end. Long-term debt amounted to C$22.25 billion compared with C$21.88 billion at the prior-quarter end. Net cash provided by operating activities increased 27.4% year over year to C$1.73 billion during the second quarter. Capital expenditures totaled C$758 million compared with C$743 million in the year-ago period. During the first six months of 2026, the company returned C$2.37 billion to shareholders through share repurchases and dividends, up 11% year over year. Canadian Pacific continues to expect 2026 core adjusted earnings per share (EPS) to grow in the low double digits from the 2025 level of C$4.61. The company expects 2026 revenue ton-miles to increase in the mid-single digits from the 2025 actual. Management continues to anticipate capital expenditures of approximately C$2.65 billion for 2026, representing a roughly 15% decline from 2025. The core adjusted effective tax rate is expected to be approximately 24.75%. CPKC expects improving freight fundamentals, commercial wins, integration benefits and disciplined cost control to support accelerated volume and earnings growth in the second half of 2026. Currently, Canadian Pacific has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Westinghouse Air Brake Technologies WAB, operating as Wabtec Corporation, reported encouraging second-quarter 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year. Quarterly adjusted EPS of $2.76 beat the Zacks Consensus Estimate of $2.63 by 4.9% and increased 21.6% year over year, owing to higher sales and operating margin expansion. Revenues climbed 17.5% to $3.18 billion and surpassed the consensus mark of $3.08 billion by 3.2%. United Airlines Holdings, Inc. UAL reported second-quarter 2026 adjusted EPS of $1.99, down 48.6% year over year but above the Zacks Consensus Estimate of $1.92 by 3.7%. Operating revenues rose 16% to $17.67 billion and were essentially in line with the $17.68 billion consensus mark. A 12.1% increase in total revenues per available seat mile or TRASM, and broad-based gains across premium, loyalty and cargo revenues, supported the top line despite sharply higher fuel costs. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Canadian Pacific Kansas City Limited (CP) : Free Stock Analysis Report United Airlines Holdings Inc (UAL) : Free Stock Analysis Report Wabtec (WAB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Union Pacific Corporation (NYSE:UNP)'s Big Boy 4014, the world's largest operating steam locomotive, has been touring the country this summer, and grown adults keep tearing up when they see it. CEO Jim Vena said the tour east of the Mississippi wouldn't have been possible without one thing: the railroad operating firm’s pending merger with Norfolk Southern, since Union Pacific's own tracks run west of the river. In part, the nostalgia tour is a goodwill campaign for the biggest deal in the company’s history. On the business itself, Union Pacific Corporation (NYSE:UNP) reported a strong quarter. Revenue rose 12% to $6.86 billion, beating the $6.71 billion expected, and adjusted earnings came in at $3.41 a share versus $3.24 expected. The company raised its full-year guidance to high-single-digit earnings growth, up from mid-single digits. The stock rose about 2% in premarket trading. Costs rose too; operating expenses climbed 13% to $4.1 billion, mostly from a 63% jump in fuel costs linked to the Iran war. Union Pacific Corporation (NYSE:UNP) is trying to buy Norfolk Southern in a deal now valued around $71.5 billion, down from an earlier $85 billion price tag as terms have moved with Union Pacific's stock. It would create the first coast-to-coast U.S. railroad. The day before earnings, Union Pacific settled with Canadian National Railway, a major opponent that had been pushing regulators to demand more information. CN will drop its opposition in exchange for expanded Midwest access and a stake in two jointly owned terminal railroads. Vena called it proof the firm is "ready to move forward in the regulatory process." The deal still isn't approved, though. The Surface Transportation Board (STB) paused its review in May and just this week ordered Union Pacific to make employee-impact data public. Rivals BNSF and Canadian Pacific Kansas City are still lobbying against it, and some shippers and state attorneys general remain opposed. The companies still expect to close the deal in the first half of 2027. That raises a real question. Is this merger clearing its last real hurdles, or did the CN settlement just remove one opponent out of several? The core business (Union Pacific's actual railroad operations) is performing well on its own, guidance beat and rose, and pricing power held up despite surging fuel costs. The CN settlement removes a credible opponent and comes with political tailwinds too: Trump has publicly backed the merger and replaced a regulator who could have opposed it. Union Pacific Corporation (NYSE:UNP) and Norfolk Southern say the deal would save shippers $3.5 billion a year and remove 2.1 million trucks from the road. Wall Street responded fast: Baird, RBC, and JPMorgan all raised price targets this week, with RBC citing the CN deal directly as strengthening the merger's case. READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy. BNSF and Canadian Pacific Kansas City (CP), both larger than CN, are still actively opposed, and shippers and state attorneys general haven't backed down. The STB's review remains paused, and forcing public disclosure of employee data suggests regulators aren't rubber-stamping this. Notably, JPMorgan raised its price target but kept a neutral rating, a sign at least one major bank isn't calling this done yet. Fuel costs are also a real, ongoing drag tied to a war with no clean resolution in sight. Insider Monkey's hedge fund database shows funds trimming ahead of this quarter. Overall, 96 funds were holding Union Pacific Corporation (NYSE:UNP) at the end of Q1 2026, down from 106, with dollar value held falling from $7.5 billion to $5.7 billion. That reflects sentiment before this week's beat and the CN settlement, both of which have since turned more positive. In contract, there were only 45 hedge funds with bullish Canadian Pacific Kansas City (CP) positions at the end of Q1. Hedge funds clearly think UNP is a better stock to buy than CP. Union Pacific had a genuinely strong quarter, and the CN settlement is a real step toward its biggest deal ever. However, one opponent down isn't the same as approved. BNSF, Canadian Pacific Kansas City, wary shippers, and a regulator still asking hard questions remain in the picture. The next real test isn't a nostalgia tour; it's whether the Surface Transportation Board restarts its review. While we acknowledge the risk and potential of UNP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UNP and that has 10,000% upside potential, check out our report about this cheapest AI stock. READ NEXT: Ryanair Holdings plc (RYAAY)'s Profit Fell by a Third on the Iran War. Is the Selloff a Buying Opportunity? and Space Exploration Technologies Corp. (SPCX) Stock Just Lost $1 Trillion in a Month. Is the Selloff a Buying Opportunity or a Warning? Disclosure: None.

Interested in Canadian Pacific Kansas City Limited? Here are five stocks we like better. Strong Q2 performance: Canadian Pacific Kansas City reported 4% volume growth, 13% revenue growth and core adjusted EPS of $1.27, up 13% year over year. Grain and automotive led results, while coal remained a significant weakness. Growth outlook remains positive: Management expects mid-single-digit volume growth in 2026, continued second-half acceleration and $1.4 billion–$1.5 billion in merger synergies by year-end. CPKC said its network has sufficient capacity to support expansion without materially increasing capital spending. Cash returns and industry concerns: Adjusted free cash flow rose 25% to $1.3 billion through the first half, while the company returned $2.4 billion to shareholders through buybacks and dividends. CEO Keith Creel criticized proposed further railroad consolidation, warning it could reduce shipper choices. Capri's Turnaround Is Taking Shape, But Is the Stock a Buy Yet? Canadian Pacific Kansas City (NYSE:CP) reported second-quarter 2026 results marked by higher freight volumes, revenue growth and double-digit adjusted earnings growth, supported by grain, automotive and cross-border traffic gains across its Canada-U.S.-Mexico network. President and Chief Executive Officer Keith Creel said the railroad recorded 4% volume growth, 13% revenue growth, a 61.6% core adjusted operating ratio and core adjusted diluted earnings per share of $1.27, up 13% from a year earlier. He said the company established quarterly volume records in grain, energy, chemicals, plastics and automotive. → This Tiny AI Supplier Could Be More Important Than the Chipmakers Copa Holdings May Be the Airline Stock Built to Break Out “With each passing quarter, that vision is becoming a reality,” Creel said of the combination of Canadian Pacific and Kansas City Southern, which created the only single-line rail network serving Canada, the U.S. and Mexico. Executive Vice President and Chief Financial Officer Nadeem Velani said reported operating ratio was 64.6%, while the core adjusted operating ratio increased 90 basis points year over year to 61.6%. Reported diluted EPS was $1.15, and core adjusted diluted EPS was $1.27. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? 5 High-Yield Stocks With Analyst Support and Room to Run Velani cited higher stock-based compensation, wage inflation, volume-related costs and casualty costs as expense pressures during the quarter. Fuel expense rose 49% from a year earlier, primarily reflecting a 52% increase in on-highway diesel prices and higher volume, partly offset by a 4% improvement in fuel efficiency. Equipment rents declined 6% on improved asset utilization, network velocity and cycle times. Velani said higher casualty costs and stock-based compensation represented a 4% impact to EPS and a roughly 120-basis-point headwind to operating ratio, while year-over-year fuel-price changes created a 130-basis-point operating-ratio headwind. → Innovative ETF Strategies That Are Paying Off This Summer Year-to-date operating cash flow increased 8%, while adjusted free cash flow rose 25% to $1.3 billion. Capital expenditures totaled $1.4 billion through the first half, and CPKC maintained its full-year capital spending target of $2.65 billion, down 15% from the prior year. The company returned $2.4 billion to shareholders in the first half through share repurchases and dividends. Velani said CPKC expects a full-year core adjusted effective tax rate of approximately 24.75%. He also said the company expects sequential improvement in revenue per ton-mile and greater volume acceleration in the second half, with lower casualty costs than in the first half potentially supporting earnings and operating-ratio improvement. Executive Vice President and Chief Marketing Officer John Brooks said second-quarter freight revenue excluding fuel reached a quarterly record, while gross ton-miles reached an all-time high. Revenue per ton-mile rose 9%, aided by higher fuel surcharge revenue, pricing strength and moderating mix headwinds. On an FX-adjusted basis, grain revenue rose 24% on 19% volume growth, with Canadian grain volumes up 24% and U.S. grain volumes up 14%. Brooks attributed the increase to a record harvest, demand into Mexico and Pacific Northwest markets. He said the company expects supply and demand to remain solid through the third quarter, while its fourth-quarter grain outlook uses a three- to five-year average assumption. Potash revenue increased 10% despite a 2% volume decline tied to port maintenance and lower mine production. Coal revenue fell 18% as volume declined 29%, reflecting production challenges at customer mines. Brooks said coal is expected to remain a headwind in the second half, though shipment levels have improved. Energy, Chemicals and Plastics revenue increased 8% on 6% volume growth, led by higher crude shipments. Metals, Minerals and Consumer Products revenue rose 16% on 7% volume growth, helped by stronger steel and aggregate traffic. Automotive revenue increased 19% on 8% volume growth, reaching another quarterly record on new business wins and longer-haul traffic. Intermodal revenue rose 11% on flat total volumes. Domestic intermodal volume increased 3%, while international volume declined 2% against strong prior-year comparisons. Brooks said the Southeast Mexico Express service with CSX saw volumes increase more than 30% from the first quarter. He said both the Southeast Mexico Express and Mexico Midwest Express services are positioned to benefit from truck-to-rail conversion opportunities associated with higher fuel prices, tighter regulatory enforcement and reduced trucking capacity. Executive Vice President and Chief Operating Officer Mark Redd said CPKC set second-quarter records for train speed, dwell, locomotive productivity and fuel efficiency. He said integration of the company’s U.S. and Canadian operating systems has improved real-time network visibility and coordination. Redd said personal injury frequency and train accidents both increased from a year earlier, though the company reported an FRA train accident rate of 1.0 and personal injury frequency of 0.96. He said CPKC is taking action to address the trends. The railroad has received all 70 Wabtec locomotives scheduled for delivery in 2026 and expects to begin receiving Progress Rail locomotives in the second half. Rail and tie replacement work is progressing ahead of schedule in Western Canada, Redd said, with installation productivity up 18% for rail and 59% for ties year over year. Management said capacity should not constrain growth. Creel said the company made significant investments required under its merger application and is positioned for expansion with relatively low incremental costs, principally additional headcount. Velani said CPKC can accommodate anticipated growth within a capital spending envelope of roughly CAD 2.6 billion to CAD 2.7 billion. Brooks said CPKC expects mid-single-digit volume growth for 2026 and sees a path toward $1.4 billion to $1.5 billion in merger synergies by year-end. He said land-bridge business between Canada and Mexico is expected to reach approximately $600 million this year, with 60% to 65% tied to Western Canada and Mexico, and management sees a longer-term path toward $1 billion. During the question-and-answer session, Creel strongly criticized proposed railroad consolidation involving Union Pacific and Norfolk Southern, as well as agreements between Union Pacific and Canadian National. He said CPKC believes its own merger added transportation options without removing existing competitive choices, while arguing that further consolidation could reduce options for shippers. Creel said CPKC would not “sit still” if further consolidation occurs and could pursue commercial arrangements with other railroads. However, he said the company’s preferred outcome would be no additional merger activity. He added that CPKC is focused on executing its growth plan amid what management characterized as improving freight demand conditions entering the second half of 2026. Canadian Pacific Kansas City (CPKC) is a North American Class I freight railroad formed through the combination of Canadian Pacific Railway and Kansas City Southern. The merged company operates an integrated rail network that spans Canada, the United States and Mexico, providing a single-line rail connection across all three countries. This transborder footprint is intended to streamline cross-border freight flows and provide shippers with direct rail access from Canadian and U.S. production centers to Mexican markets and ports. CPKC's core business is freight transportation and related logistics services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Canadian Pacific Kansas City Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Revenue: Q2 record freight revenues (excluding fuel) up 13% year-over-year; all-time record GTMs up 4%. Operating Ratio (OR): Core adjusted operating ratio of 61.6%, up 90 basis points year-over-year. Earnings Per Share (EPS): Core adjusted diluted EPS of $1.27, up 13% year-over-year. Volume Growth: Volume growth of 4% in the quarter; record volumes in grain, energy, chemicals, plastics, and automotive. Bulk Revenue (Grain): Record quarter with revenue up 24% on 19% volume growth. Bulk Revenue (Potash): Revenue up 10% on a 2% decline in volume. Bulk Revenue (Coal): Revenue declined 18% on a 29% reduction in volumes. Merchandise Revenue (Energy, Chemicals & Plastics): Revenue increased 8% on 6% volume growth. Merchandise Revenue (Forest Products): Revenue increased 2% on 2% lower volumes. Merchandise Revenue (Metals, Minerals & Consumer Products): Revenue increased 16% on 7% volume growth. Automotive Revenue: Record quarter with revenue up 19% on 8% volume growth. Intermodal Revenue: Revenue increased 11% on flat volumes. Core Adjusted Comp & Benefits Expense: $702 million, driven by higher stock-based compensation, wage inflation, and volume-related costs. Fuel Expense: Up 49% year-over-year, driven by a 52% increase in on-highway diesel price and higher volume. Core Adjusted PSNO Expense: $585 million, driven by higher casualty costs and inflation. Net Interest Expense: $237 million ($231 million excluding purchase accounting). Income Tax Expense: $335 million ($370 million adjusted for purchase accounting and significant items). Year-to-Date Net Cash from Operations: Up 8%, driven by higher operating income. Year-to-Date Capital Expenditures: $1.4 billion; full-year CapEx guidance of $2.65 billion (15% reduction year-over-year). Year-to-Date Adjusted Free Cash Flow: $1.3 billion, up 25% year-over-year. Shareholder Returns: $2.4 billion returned through share repurchases and dividends in the first half of the year. Warning! GuruFocus has detected 10 Warning Signs with CP. Is CP fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record volume growth of 4% and revenue growth of 13% in Q2 2026. Established new records in key operating metrics like train velocity and terminal fluidity. Strong growth in grain, energy, chemicals, plastics, and automotive sectors. Continued success of commercial initiatives like Southeast Mexico Express and Mexico Midwest Express. Robust commercial pipeline with potential for mid-single-digit volume growth in 2026. Coal revenue declined 18% due to production challenges at customer mines. Safety metrics worsened with increases in personal injury frequency and train accidents. Higher casualty costs and stock-based compensation impacted EPS by $0.04. Fuel expense increased 49% year-over-year due to higher diesel prices. Uncertainty from potential rail consolidation and competitive pressures from CN and UP deals. Here are the key highlights from the Canadian Pacific Kansas City Ltd (NYSE:CP) Q2 2026 earnings call. Q: How do you view the competitive landscape following the recent agreements between CN and Union Pacific, specifically regarding the EJ&E line and access to Mexico? A: (Keith Creel, President & CEO) I view the EJ&E acquisition as a significant operational advantage for CN, providing a release valve around Chicago. However, I question the long-term value of what CN gave up versus what they got. The access to Mexico via Memphis is still a three-line move, operationally controlled by UP, and still faces the bottleneck at Eagle Pass. We are not afraid of competition. Our single-line network, particularly the land bridge between Western Canada and Mexico, provides a unique product that cannot be replicated. The lion's share of our cross-border business originates in Western Canada, which is a significant disadvantage for CN's route models that must go east before heading south. Q: Can you frame the opportunity for idiosyncratic commercial synergies going into 2027? And can you elaborate on the notable expense headwinds in the quarter? A: (John Brooks, CMO) We see a good run rate to achieve $1.4-$1.5 billion in synergies by year-end, a step-up of over $300 million. Growth is coming from all lines of business, but we are still in the early innings for grain and intermodal. We are challenging the team to push for a second train pair on the MMX service and see further opportunities in automotive contracts. (Nadeem Velani, CFO) The notable headwinds were casualty costs and stock-based compensation, which together represented a $0.05 headwind to EPS and about 150 basis points to the operating ratio. Without these, the OR would have been closer to 60%. Q: How do you think about aligning resources with the growth profile John is laying out over the next few years? A: (Mark Redd, COO) We are constantly planning for John's demand. We have new labor agreements, like the one south of Eastern Oklahoma to Laredo, which will provide synergies and headcount that can be redeployed for future growth. We also have opportunities to increase train lengths. We communicate constantly with John, and since new business doesn't appear overnight, we have plenty of time to plan and add resources as needed. Q: Can you provide commentary on yields, particularly core renewals and the impact of length of haul? A: (John Brooks, CMO) We are still seeing a good length-of-haul enhancement, about 3% year-over-year, with more opportunities from land bridge business. On pricing, we have been at the higher end of our 3% to 4% guidance and expect that to potentially accelerate given the improving trucking environment. Renewals came in strong, with mix being a 1-2 point headwind, with the balance of the yield improvement driven by fuel and FX. Q: Do you believe the concessions extracted by CN put the UP-CN merger on a better competitive platform? A: (Keith Creel, President & CEO) No, I don't think it changes the math. It's a few steps in a positive direction, but the fundamental problems remain. The merger still creates significant monopolistic market concentration and operational risk, especially with the EJ&E now in play. The "enhanced competition" is temporary and not inclusive. The STB's mandate is to enhance competition, and this deal still reduces options for shippers. Our merger was additive, creating new single-line options. This merger is a substitution that takes options away. Q: Does the CN-UP deal prompt you to look for your own deals with BNSF or CSX? A: (Keith Creel, President & CEO) We have a menu of options and can create compelling products with partners like BNSF and CSX outside of a merger. The best outcome is no merger at all, which would allow UP and CN to create value independently. In that scenario, we would also pursue our own commercial agreements. We have never been closer to BNSF and CSX, and we are developing market intelligence and route options to present compelling value propositions. We will not sit still if a merger environment is forced upon us. Q: How are you thinking about network capacity as the upcycle comes? A: (Keith Creel, President & CEO) We are very well positioned. Our merger application included significant investments to prepare for growth, and we have built ahead. We have ample locomotive and track capacity. The only thing we need to flex up is incremental headcount. (Mark Redd, COO) We have unlocked capacity through new agreements in Shreveport, Louisiana, and the connection with CSX. We have also invested $75 million in Mexico on top of the new bridge. Capacity will not be an issue. Q: Do you feel we are at an inflection point where synergy opportunities and a more supportive macro will lead to a meaningful acceleration in earnings growth? A: (John Brooks, CMO) It's undeniable that the freight environment since April 2023 has been challenging, yet we have still stacked up impressive growth. Now, with a potential tailwind from the macro environment and us still in the mid-innings of product development, the outlook is very compelling. (Nadeem Velani, CFO) The operating leverage story is just beginning. We have reduced headcount by 500 while volumes are up 3-4% and accelerating. We can accommodate this growth with our current capital plan, which will generate significant free cash flow and accelerate earnings. Q: Do you feel your customers are distracted by the ongoing industry developments like the UP-CN merger? A: (Keith Creel, President & CEO) Yes, it requires a lot of attention. Customers want to protect competitive options and optionality. They are not looking for less competition. (John Brooks, CMO) Since COVID, customers are looking for more options to increase supply chain resiliency. That's why we garnered so much support for our merger. The current proposals are a distraction, and customers are questioning whether they will truly get enhanced competition. Q: What is your outlook for coal and refined products to Mexico? A: (John Brooks, CMO) Q2 was the worst for coal. We expect it to get progressively better through Q3 and Q4 as our customer's mine production improves. For refined fuels to Mexico, the business has been nearly nonexistent For the complete transcript of the earnings call, please refer to the full earnings call transcript.

For the quarter ended June 2026, Canadian Pacific Kansas City (CP) reported revenue of $3.01 billion, up 12.5% over the same period last year. EPS came in at $0.92, compared to $0.81 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $2.91 billion, representing a surprise of +3.26%. The company delivered an EPS surprise of +3.37%, with the consensus EPS estimate being $0.89. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Canadian Pacific Kansas City performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Core adjusted operating ratio: 61.6% compared to the 61.6% average estimate based on four analysts. Carloads - Total: 1.15 million compared to the 1.15 million average estimate based on three analysts. Carloads - Automotive: 64.6 thousand versus the three-analyst average estimate of 64.07 thousand. Revenue ton miles (RTMs) - Total: 57.58 billion versus 57.65 billion estimated by three analysts on average. Revenue ton-miles (RTMs) - Intermodal: 10.3 billion compared to the 10.27 billion average estimate based on three analysts. Carloads - Grain: 168 thousand compared to the 168.96 thousand average estimate based on three analysts. Carloads - Coal: 94.4 thousand versus the three-analyst average estimate of 93.33 thousand. Carloads - Potash: 45.7 thousand compared to the 51.75 thousand average estimate based on three analysts. Carloads - Fertilizers and sulphur: 16.1 thousand versus 16.25 thousand estimated by three analysts on average. Carloads - Forest products: 31.1 thousand compared to the 30.84 thousand average estimate based on three analysts. Carloads - Energy, chemicals and plastics: 140.4 thousand compared to the 134.12 thousand average estimate based on three analysts. Carloads - Metals, minerals and consumer products: 134.1 thousand versus 132.48 thousand estimated by three analysts on average. View all Key Company Metrics for Canadian Pacific Kansas City here>>> Shares of Canadian Pacific Kansas City have returned +5.8% over the past month versus the Zacks S&P 500 composite's +1.9% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Canadian Pacific Kansas City Limited (CP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CALGARY, AB, July 29, 2026 /CNW/ -- Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC) today announced its second-quarter results, including revenues of $4.2 billion, diluted earnings per share (EPS) of $1.15 and core adjusted diluted EPS1 of $1.27. "This unrivalled three-nation network and CPKC's exceptional team of railroaders delivered another quarter of strong revenue and earnings growth," said Keith Creel, CPKC President and Chief Executive Officer. "Our disciplined execution of Precision Scheduled Railroading produced excellent operating performance in the quarter. We are well-positioned to accelerate volume and earnings growth in the second half of 2026." Second-quarter 2026 results Revenues increased by 13 percent to $4.2 billion from $3.7 billion in Q2 2025 Reported operating ratio (OR) increased by 90 basis points to 64.6 percent from 63.7 percent in Q2 2025 Core adjusted OR1 increased 90 basis points to 61.6 percent from 60.7 percent in Q2 2025 Reported diluted EPS decreased 14 percent to $1.15 from $1.33 in Q2 2025 Core adjusted diluted EPS1 increased 13 percent to $1.27 from $1.12 in Q2 2025 Volumes, as measured in revenue ton-miles, increased 4 percent "Successful implementation of our North American strategy and synergy realization, improving freight fundamentals, and disciplined cost control position CPKC to continue delivering differentiated earnings growth and value creation over the long term," Creel added. "We remain confident in our ability to continue creating unique long-term value for our customers, communities and shareholders, as we safely and efficiently serve the North American economy." Conference Call DetailsCPKC will discuss its results with the financial community in a conference call beginning at 4:30 p.m. ET (2:30 p.m. MT) on July 29, 2026. Conference Call AccessCanada and U.S.: 800-579-2543International: 785-424-1789*Conference ID: CPKCQ226 Callers should dial in 10 minutes prior to the call. Webcast We encourage you to access the webcast and presentation material in the Investors section of CPKC's website at investor.cpkcr.com. A replay of the second-quarter conference call will be available through August 5, 2026, at 800-695-2185 (Canada/U.S.) or 402-530-9028 (International). Forward-looking informationThis news release contains certain forward-looking information and forward-looking statements (collectively, "forward-looking statements") within the meaning of applicable securities laws in both the U.S. and Canada. Forward-looking statements include, but are not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking statements may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "guidance", "should" or similar words suggesting future outcomes. This news release contains forward-looking statements relating, but not limited, to statements concerning our ability to accelerate volume and differentiated earnings growth in the second half of 2026, value creation for our customers, communities and shareholders, strategic initiatives and investments, the success of our business, the realization of anticipated benefits and synergies of the CP-KCS combination, and the opportunities arising therefrom, our operations, priorities and plans, anticipated financial and operational performance, business prospects and demand for our services and growth opportunities. The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to CPKC's experience and its perception of historical trends, and include, but are not limited to, expectations, estimates, projections and assumptions relating to: changes in business strategies, North American and global economic growth and conditions; commodity demand growth; sustainable industrial and agricultural production; commodity prices and interest rates; foreign exchange rates; core adjusted effective tax rates; performance of our assets and equipment; sufficiency of our budgeted capital expenditures in carrying out our business plan; geopolitical conditions, applicable laws, regulations and government policies, including, without limitation, those relating to regulation of rates, tariffs, import/export, trade, taxes, wages, labour and immigration; the availability and cost of labour, services and infrastructure; labour disruptions; the satisfaction by third parties of their obligations to CPKC; and carbon markets, evolving sustainability strategies, and scientific or technological developments. Although CPKC believes the expectations, estimates, projections and assumptions reflected in the forward-looking statements presented herein are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty. Undue reliance should not be placed on forward-looking statements as actual results may differ materially from those expressed or implied by forward-looking statements. By their nature, forward-looking statements involve numerous inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, including, but not limited to, the following factors: changes in business strategies and strategic opportunities; general Canadian, U.S., Mexican and global social, economic, political, credit and business conditions; risks associated with agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures, including competition from other rail carriers, trucking companies and maritime shippers in Canada, the U.S. and Mexico; North American and global economic growth and conditions; industry capacity; shifts in market demand; changes in commodity prices and commodity demand; uncertainty surrounding timing and volumes of commodities being shipped by CPKC; inflation; geopolitical instability; changes in laws, regulations and government policies, including, without limitation, those relating to regulation of rates, tariffs, import/export, trade, wages, labour and immigration; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; disruption in fuel supplies; uncertainties of investigations, proceedings or other types of claims and litigation; compliance with environmental regulations; labour disputes; changes in labour costs and labour difficulties; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; sufficiency of budgeted capital expenditures in carrying out business plans; services and infrastructure; the satisfaction by third parties of their obligations; currency and interest rate fluctuations; exchange rates; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; trade restrictions, including the imposition of any tariffs, or other changes to international trade arrangements; the effects of current and future multinational trade agreements on or other developments affecting the level of trade among Canada, the U.S. and Mexico; climate change and the market and regulatory responses to climate change; anticipated in-service dates; success of hedging activities; operational performance and reliability; customer, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; the adverse impact of any termination or revocation by the Mexican government of Kansas City Southern de México, S.A. de C.V.'s concession; public opinion; various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches, volcanism and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; acts of terrorism, war or other acts of violence or crime or risk of such activities; insurance coverage limitations; material adverse changes in economic and industry conditions; the outbreak of a pandemic or contagious disease and the resulting effects on economic conditions; the demand environment for logistics requirements and energy prices, restrictions imposed by public health authorities or governments; fiscal and monetary policy responses by governments and financial institutions; disruptions to global supply chains; the realization of anticipated benefits and synergies of the CP-KCS transaction and the timing thereof; the satisfaction of the conditions imposed by the U.S. Surface Transportation Board in its March 15, 2023 decision; the successful integration of KCS into CPKC; the focus of management time and attention on the CP-KCS integration and other disruptions arising from the CP-KCS integration; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favourable terms or at all; cost of debt and equity capital; improvement in data collection and measuring systems; industry-driven changes to methodologies; and the ability of the management of CPKC to execute key priorities, including those in connection with the CP-KCS transaction. The foregoing list of factors is not exhaustive. These and other factors that could cause actual results to differ materially from those described in the forward-looking statements contained in this news release are detailed from time to time in reports filed by CPKC with securities regulators in Canada and the United States, which can be accessed on SEDAR+ (www.sedarplus.ca) and EDGAR (www.sec.gov). Reference should be made to "Part I - Item 1A – Risk Factors" and "Part II - Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements" in CPKC's annual report on Form 10-K and "Part II – Item 1A – Risk Factors" and "Part I – Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements" in CPKC's interim reports on Form 10-Q. The forward-looking statements contained in this news release are made as of the date hereof. Except as required by law, CPKC undertakes no obligation to update publicly or otherwise revise any forward-looking statements, or the foregoing assumptions and risks affecting such forward-looking statements, whether as a result of new information, future events or otherwise. About CPKCWith its global headquarters in Calgary, Alta., Canada, CPKC is the first and only single-line transnational railway linking Canada, the United States and México, with unrivaled access to major ports from Vancouver to Atlantic Canada to the Gulf Coast to Lázaro Cárdenas, México. Stretching approximately 20,000 route miles and employing approximately 20,000 railroaders, CPKC provides North American customers unparalleled rail service and network reach to key markets across the continent. CPKC is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpkcr.com to learn more about the rail advantages of CPKC. CP-IR FINANCIAL STATEMENTS INTERIM CONSOLIDATED STATEMENTS OF INCOME(unaudited) INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(unaudited) INTERIM CONSOLIDATED BALANCE SHEETS AS AT(unaudited) INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited) INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(unaudited) NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTSJune 30, 2026(unaudited) 1 Description of business and basis of presentation Canadian Pacific Kansas City Limited ("CPKC" or the "Company") owns and operates a transcontinental freight railway spanning Canada, the United States ("U.S."), and Mexico. CPKC provides rail and intermodal transportation services over a network of approximately 20,000 miles, serving principal business centres across Canada, the U.S., and Mexico. The Company transports bulk commodities, merchandise freight, and intermodal traffic. CPKC's Common Shares ("Common Shares") trade on the Toronto Stock Exchange ("TSX") and New York Stock Exchange under the symbol "CP". These unaudited interim consolidated financial statements ("Interim Consolidated Financial Statements") have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"). They do not include all of the information required for a complete set of annual financial statements prepared in accordance with GAAP and should be read in conjunction with the Company's audited consolidated financial statements as at and for the year ended December 31, 2025 ("last annual consolidated financial statements"). Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company's financial position and results of operations since the last annual consolidated financial statements. These Interim Consolidated Financial Statements have been prepared using the same significant accounting policies used in the last annual consolidated financial statements, except for the adoption of new accounting standards (see Note 2). Amounts are stated in Canadian dollars unless otherwise noted. The Company's operations and income for interim periods can be affected by seasonal fluctuations such as changes in customer demand and weather conditions, and may not be indicative of annual results. Operating segment The Company only has one operating segment: rail transportation. The Company's measure of segment profit is reported on the Interim Consolidated Statements of Income as "Net income attributable to controlling shareholders". CPKC's significant segment expenses are consistent with the expenses presented on the Interim Consolidated Statements of Income. 2 Accounting changes Accounting Standards Update ("ASU") 2025-05 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets On January 1, 2026, the Company prospectively adopted ASU 2025-05, which simplifies estimating credit losses on current accounts receivable and current contract assets. Under the new guidance, CPKC elected to adopt a practical expedient allowing the Company to assume that conditions existing as of the balance sheet date will remain unchanged over the remaining life of the asset when developing reasonable and supportable forecasts for estimating expected credit losses. Adoption of ASU 2025-05 did not have a material impact on the Company's Interim Consolidated Financial Statements. Other accounting standards that became effective during the three and six months ended June 30, 2026, did not have a material impact on the Company's Interim Consolidated Financial Statements. Recently issued accounting pronouncements are not expected to have a material impact on the Company's financial position or results of operations upon adoption. 3 Revenues The following table presents disaggregated information about the Company's revenues from contracts with customers by major source: 4 Gain on sale of equity investment On April 1, 2025, CPKC sold its 50% equity method investment in the Panama Canal Railway Company to APM Terminals Panama Rail LP ("APM Terminals"), a subsidiary of A.P. Moller-Maersk A/S, for gross proceeds of U.S. $350 million. After finalizing purchase price adjustments for cash acquired and debt and net working capital assumed by APM Terminals, the Company received cash consideration of U.S. $344 million ($493 million) and recognized a pre-tax gain of U.S. $232 million ($333 million) in "Gain on sale of equity investment". The after-tax gain was U.S. $196 million ($282 million). 5 Income taxes The effective income tax rate including discrete items for the three and six months ended June 30, 2026 was 24.65% and 24.63%, respectively, compared to 22.45% and 23.26%, respectively for the same periods in 2025. For the three months ended June 30, 2026, the effective income tax rate was 24.75%, excluding the discrete items of amortization of the fair value adjustments associated with purchase accounting of $94 million and acquisition-related costs of $27 million, both related to the Kansas City Southern ("KCS") acquisition, and advisory costs related to the analysis and advocacy in connection with the U.S. Surface Transportation Board's (the "STB") review of the proposed merger between Union Pacific Corporation ("UP") and Norfolk Southern Corporation ("NS") of $14 million. For the three months ended June 30, 2025, the effective income tax rate was 24.50%, excluding the discrete items of a gain on sale of an equity investment of $333 million, amortization of the fair value adjustments associated with purchase accounting of $96 million and acquisition-related costs of $19 million, both related to the KCS acquisition. For the six months ended June 30, 2026, the effective income tax rate was 24.75%, excluding the discrete items of amortization of the fair value adjustments associated with purchase accounting of $187 million and acquisition-related costs of $36 million, both related to the KCS acquisition, and advisory costs related to the analysis and advocacy in connection with the STB's review of the proposed merger between UP and NS of $27 million. For the six months ended June 30, 2025, the effective income tax rate was 24.50%, excluding the discrete items of a gain on sale of an equity investment of $333 million, amortization of the fair value adjustments associated with purchase accounting of $190 million and acquisition-related costs of $39 million, both related to the KCS acquisition. 2014 Tax Assessment Canadian Pacific Kansas City Mexico's ("CPKCM") 2014 Tax Assessment is currently in litigation (see Note 14). 6 Earnings per share For the three and six months ended June 30, 2026, there were 0.3 million and 0.8 million options, respectively, excluded from the computation of diluted earnings per share because their effects were not dilutive (three and six months ended June 30, 2025 - 1.8 million and 1.6 million, respectively). 7 Changes in Accumulated other comprehensive income ("AOCI") by component Changes in AOCI attributable to controlling shareholders, net of tax, by component are as follows: 8 Accounts receivable, net 9 Debt During the six months ended June 30, 2026, the Company repaid, at maturity, U.S. $250 million ($339 million) 3.70% 10.5-year notes and U.S. $250 million ($345 million) 3.125% 10-year notes. Issuance of long-term debt During the six months ended June 30, 2026, the Company issued U.S. $600 million ($821 million) 4.00% 3-year unsecured notes due March 15, 2029 for net proceeds of U.S. $597 million ($816 million), and U.S. $600 million ($821 million) 5.50% 30-year unsecured notes due March 15, 2056 for net proceeds of U.S. $589 million ($805 million). The issued notes pay interest semi-annually and carry a negative pledge. Credit facility Effective July 6, 2026, the Company amended its revolving credit facility agreement (the "facility") to extend the maturity dates of its two-year U.S. $1.1 billion tranche and five-year U.S. $1.1 billion tranche to June 25, 2028, and June 25, 2031, respectively. As at June 30, 2026, the facility was undrawn (December 31, 2025 - undrawn). The Company presents draws and repayments on the facility in the Interim Consolidated Statements of Cash Flows on a net basis. Commercial paper program Effective March 27, 2026, the Company increased the maximum size of its commercial paper program through the addition of a Canadian dollar commercial paper program which allows the Company to borrow Canadian dollars in the form of unsecured promissory notes. This increased the maximum amount the Company can borrow under the program from U.S. $1.5 billion to U.S. $2.2 billion, or the Canadian dollar equivalent, on a combined basis. Both the Canadian and U.S. dollar commercial paper programs are backed by the U.S. $2.2 billion facility. As at June 30, 2026, the Company had total commercial paper borrowings outstanding of U.S. $1,028 million ($1,461 million) recognized in "Long-term debt maturing within one year" on the Company's Interim Consolidated Balance Sheets (December 31, 2025 - U.S. $850 million ($1,165 million)). The weighted-average interest rate on these borrowings as at June 30, 2026 was 2.70% (December 31, 2025 - 4.02%). The Company presents issuances and repayments of commercial paper, all of which have a maturity of less than 90 days, in the Interim Consolidated Statements of Cash Flows on a net basis. 10 Financial instruments A. Fair values of financial instruments The Company categorizes its financial assets and liabilities measured at fair value into a three-level hierarchy that prioritizes those inputs to valuation techniques used to measure fair value based on the degree to which they are observable. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices in active markets for identical assets and liabilities; Level 2 inputs, other than quoted prices included within Level 1, are observable for the asset or liability either directly or indirectly; and Level 3 inputs are not observable in the market. The Company's short-term financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and short-term borrowings, including commercial paper and term loans. The carrying value of short-term financial instruments approximate their fair value. The carrying value of the Company's debt does not approximate its fair value. The estimated fair value has been determined based on market information, where available, or by discounting future payments of principal and interest at estimated interest rates expected to be available to the Company at the balance sheet date. All measurements are classified as Level 2. The Company's long-term debt, including current maturities, with a carrying value of $23,686 million as at June 30, 2026 (December 31, 2025 - $22,023 million), had a fair value of $22,182 million (December 31, 2025 - $20,740 million). B. Financial risk management Foreign exchange ("FX") management Net investment hedgeThe majority of the Company's U.S. dollar-denominated long-term debt, finance lease obligations, and operating lease liabilities have been designated as a hedge of the Company's net investment in foreign subsidiaries. This designation has the effect of mitigating volatility on Net income by offsetting long-term FX gains and losses on U.S. dollar-denominated long-term debt and gains and losses on its net investment. The effect of the Company's net investment hedge for the three and six months ended June 30, 2026 was an FX loss of $134 million and $257 million, respectively (three and six months ended June 30, 2025 - FX gain of $299 million and $305 million, respectively) recognized in "Other comprehensive income (loss)". 11 Share repurchases On January 28, 2026, the Company announced a normal course issuer bid ("NCIB"), commencing February 2, 2026, to purchase up to 44.9 million Common Shares in the open market for cancellation on or before February 1, 2027. On February 27, 2025, the Company announced a NCIB, commencing March 3, 2025, to purchase up to 37.3 million Common Shares in the open market for cancellation on or before March 2, 2026. By October 29, 2025, the Company had purchased and cancelled all 37.3 million Common Shares authorized to be purchased under the NCIB. All purchases were made in accordance with the respective NCIB at prevailing market prices plus brokerage fees, with consideration allocated to "Share capital" up to the average carrying amount of the Common Shares and any excess allocated to "Retained earnings". In accordance with Canadian tax legislation, the Company has accrued for a 2% tax on the fair market value of Common Shares repurchased (net of qualifying issuances of equity) as a direct cost of Common Share repurchases recognized in Shareholders' equity. During the three and six months ended June 30, 2026, the Company has accrued a liability of $25 million and $36 million, respectively, for the tax due on the net share repurchases made, payable within the first quarter of the following year. The following table provides activities under the share repurchase program: 12 Pension and other benefits During the three months ended June 30, 2026, the Company received a refund, net of contributions, from its defined benefit pension plans of $1 million, and during the six months ended June 30, 2026, made contributions, net of refunds, of $2 million (three and six months ended June 30, 2025 - $4 million and $8 million contributions, net of refunds, respectively). Net periodic benefit (recovery) cost for defined benefit pension plans and other benefits included the following components: 13 Stock-based compensation As at June 30, 2026, the Company had several stock-based compensation plans including stock option plans, various cash‑settled liability plans, and an employee share purchase plan. These plans resulted in an expense for the three and six months ended June 30, 2026 of $94 million and $143 million, respectively (three and six months ended June 30, 2025 - $59 million and $92 million, respectively). Stock options plan In the six months ended June 30, 2026, under the Company's stock option plan, the Company issued 1,189,411 options at the weighted-average price of $104.69 per share, based on the closing price of the Company's Common Shares on the TSX at the grant date. Pursuant to the employee plan, these options may be exercised upon vesting, which is between 12 months and 48 months after the grant date, and will expire seven years from the grant date. Under the fair value method, the fair value of the stock options at the grant date was approximately $30 million. Performance share unit plans During the six months ended June 30, 2026, the Company issued 629,722 Performance Share Units ("PSUs") with a grant date fair value of $66 million and 20,386 Performance Deferred Share Units ("PDSUs") with a grant date fair value, including the fair value of expected future matching units, of $3 million. PSUs and PDSUs attract dividend equivalents in the form of additional units based on dividends paid on the Company's Common Shares, and vest three to four years after the grant date, contingent on the Company's performance ("performance factor"). Vested PSUs are settled in cash. Vested PDSUs are converted into Deferred Share Units ("DSUs") pursuant to the DSU plan, are eligible for a 25% Company match if the employee has not exceeded their Common Share ownership requirements, and are settled in cash only when the holder ceases their employment with the Company. The performance period for all PSUs and all PDSUs granted in the six months ended June 30, 2026 is January 1, 2026 to December 31, 2028 and the performance factors are Free Cash Flow ("FCF"), Total Shareholder Return ("TSR") compared to the Standard and Poor's ("S&P")/TSX 60 Index, and TSR compared to the S&P 500 Industrials Index. The performance period for the 544,175 PSUs and 26,333 PDSUs granted in 2023 was January 1, 2023 to December 31, 2025, and the performance factors were FCF, Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA"), TSR compared to the S&P/TSX 60 Index, TSR compared to the S&P 500 Industrials Index, and TSR compared to other Class I railways. The resulting payout was 91% of the outstanding units multiplied by the Company's average Common Share price calculated based on the last 30 trading days preceding December 31, 2025. In the first quarter of 2026, payouts were $42 million on 461,766 PSUs, including dividends reinvested. The 26,555 PDSUs that vested on December 31, 2025, with a fair value of $3 million, including dividends reinvested and matching units, will be paid out in future reporting periods pursuant to the DSU plan (as described above). 14 Contingencies Litigation In the normal course of its operations, the Company becomes involved in various legal actions, including claims relating to injuries and damage to property. The Company maintains provisions it considers to be adequate for such actions. While the final outcome with respect to actions outstanding or pending as at June 30, 2026 cannot be predicted with certainty, it is the opinion of management that their resolution will not have a material adverse effect on the Company's business, financial position, results of operations, or liquidity. However, an unexpected adverse resolution of one or more of these legal actions could have a material adverse effect on the Company's business, financial position, results of operations, or liquidity in a particular quarter or fiscal year. Legal proceedings related to Lac-Mégantic rail accident On July 6, 2013, a train carrying petroleum crude oil operated by Montréal Maine and Atlantic Railway ("MMAR") or a subsidiary, Montréal Maine & Atlantic Canada Co. ("MMAC" and collectively the "MMA Group"), derailed in Lac-Mégantic, Québec. The derailment occurred on a section of railway owned and operated by the MMA Group and while the MMA Group exclusively controlled the train. Following the derailment, MMAC sought court protection in Canada under the Companies' Creditors Arrangement Act and MMAR filed for bankruptcy in the U.S. Plans of arrangement were approved in both Canada and the U.S. (the "Plans"), providing for the distribution of approximately $440 million amongst those claiming derailment damages. A number of legal proceedings, set out below, were commenced in Canada and the U.S. against the Company and others: (1) Québec's Minister of Sustainable Development, Environment, Wildlife and Parks ordered various parties, including the Company, to remediate the derailment site (the "Cleanup Order") and served the Company with a Notice of Claim for $95 million for those costs. The Company appealed the Cleanup Order and contested the Notice of Claim with the Administrative Tribunal of Québec. These proceedings are stayed pending determination of the Attorney General of Québec ("AGQ") action (paragraph 2 below). (2) The AGQ sued the Company in the Québec Superior Court claiming $409 million in damages, which was further amended and reduced to $231 million (the "AGQ Action"). The AGQ Action alleges that: (i) the Company was responsible for the petroleum crude oil from its point of origin until its delivery to Irving Oil Ltd.; and (ii) the Company is vicariously liable for the acts and omissions of the MMA Group. (3) A class action in the Québec Superior Court on behalf of persons and entities residing in, owning or leasing property in, operating a business in, or physically present in Lac-Mégantic at the time of the derailment was certified against the Company on May 8, 2015 (the "Class Action"). Other defendants including MMAC and Mr. Thomas Harding ("Harding") were added to the Class Action on January 25, 2017. On November 28, 2019, the plaintiffs' motion to discontinue their action against Harding was granted. The Class Action seeks unquantified damages, including for wrongful death, personal injury, property damage, and economic loss. (4) Eight subrogated insurers sued the Company in the Québec Superior Court claiming approximately $16 million in damages, which was amended and reduced to approximately $14 million (the "Promutuel Action"), and two additional subrogated insurers sued the Company claiming approximately $3 million in damages (the "Royal Action"). Both actions contain similar allegations as the AGQ Action. The actions do not identify the subrogated parties. As such, the extent of any overlap between the damages claimed in these actions and under the Plans is unclear. The Royal Action is stayed pending determination of the consolidated proceedings described below. On December 11, 2017, the AGQ Action, the Class Action and the Promutuel Action were consolidated. The joint liability trial of these consolidated claims commenced on September 21, 2021 with oral arguments ending on June 15, 2022. The Québec Superior Court issued a decision on December 14, 2022 dismissing all claims against the Company, finding that the Company's actions were not the direct and immediate cause of the accident and the damages suffered by the plaintiffs. All three plaintiffs filed a declaration of appeal on January 13, 2023. The appeal was heard October 7 to 10, 2024 by the Québec Court of Appeal. On February 26, 2025, the Québec Court of Appeal issued its unanimous decision upholding the trial decision and dismissing the appeals in their entirety. On April 28, 2025, all three plaintiffs filed applications for leave to appeal to the Supreme Court of Canada. On May 30, 2025, the Company filed its response to the plaintiffs' leave applications. On May 14, 2026, the Supreme Court of Canada dismissed all three plaintiffs' filed applications for leave to appeal. (5) Forty-eight plaintiffs (all individual claims joined in one action) sued the Company, MMAC, and Harding in the Québec Superior Court claiming approximately $5 million in damages for economic loss and pain and suffering, and asserting similar allegations as in the Class Action and the AGQ Action. The majority of the plaintiffs opted-out of the Class Action and all but two are also plaintiffs in litigation against the Company, described in paragraph 7 below. This action is stayed pending determination of the consolidated claims described above. (6) The MMAR U.S. bankruptcy estate representative commenced an action against the Company in November 2014 in the Maine Bankruptcy Court claiming that the Company failed to abide by certain regulations and seeking approximately U.S. $30 million in damages for MMAR's loss in business value according to an expert report filed by the bankruptcy estate. This action asserts that the Company knew or ought to have known that the shipper misclassified the petroleum crude oil and therefore should have refused to transport it. Summary judgement motion was argued and taken under advisement on June 9, 2022. On May 23, 2023, the case management judge stayed the proceedings pending the outcome of the appeal in the Canadian consolidated claims. On April 18, 2025, the Court lifted the stay and ordered briefing concerning the Company's request for summary judgement based on the preclusive effect of matters decided in other Lac-Mégantic cases. The Court would address that basis for summary judgement first, then would address other arguments for summary judgement, if necessary, afterwards. On October 8, 2025, the Court heard the Company's summary judgement motion. On April 21, 2026, the Court granted CPKC's motion for summary judgement, dismissing the bankruptcy estate representative's claims. The deadline for any appeal passed in May 2026 and no appeal was filed. (7) The class and mass tort action commenced against the Company in June 2015 in Texas (on behalf of Lac-Mégantic residents and wrongful death representatives) and the wrongful death and personal injury actions commenced against the Company in June 2015 in Illinois and Maine, were all transferred and consolidated in Federal District Court in Maine (the "Maine Actions"). The Maine Actions allege that the Company negligently misclassified and improperly packaged the petroleum crude oil. On the Company's motion, the Maine Actions were dismissed. The plaintiffs appealed the dismissal decision to the U.S. First Circuit Court of Appeals, which dismissed the plaintiffs' appeal on June 2, 2021. The plaintiffs further petitioned the U.S. First Circuit Court of Appeals for a rehearing, which was denied on September 8, 2021. On January 24, 2022, the plaintiffs further appealed to the U.S. Supreme Court on two bankruptcy procedural grounds. On May 31, 2022, the U.S. Supreme Court denied the petition, thereby rejecting the plaintiffs' appeal. (8) The trustee for the wrongful death trust commenced Carmack Amendment claims against the Company in North Dakota Federal Court, seeking to recover approximately U.S. $6 million for damaged rail cars and lost crude oil and reimbursement for the settlement paid by the consignor and the consignee under the Plans (alleged to be U.S. $110 million and U.S. $60 million, respectively). The Court issued an Order on August 6, 2020 granting and denying in parts the parties' summary judgement motions which has been reviewed and confirmed following motions by the parties for clarification and reconsideration. Final briefs of dispositive motions for summary judgement and for reconsideration on tariff applicability were submitted on September 30, 2022. On January 20, 2023, the Court granted in part the Company's summary judgement motion by dismissing all claims for recovery of settlement payments but leaving for trial the determination of the value of the lost crude oil. It also dismissed the Company's motion for reconsideration on tariff applicability. The remaining issues of the value of the lost crude oil and applicability of judgement reduction provisions did not require trial, and were fully briefed in 2024. On January 5, 2024, the Court issued its decision finding that the Company was liable for approximately U.S. $3.9 million plus pre-judgement interest, but declined to determine whether judgement reduction provisions were applicable, referring the parties to a court in Maine on that issue. On January 18, 2024, the Company filed a motion for reconsideration for the Court to apply the judgement reduction provisions. On January 19, 2024, the trustee for the wrongful death trust filed a Notice of Appeal for the January 5, 2024 decision, as well as prior decisions. On February 23, 2024, the Court denied the Company's motion for reconsideration, again referring the parties to a court in Maine to apply the judgement reduction provision. On March 6, 2024, the Company filed its notice of appeal of this latest ruling, as well as prior decisions. The appeal was heard on March 18, 2025. On July 3, 2025, the U.S. Eighth Circuit Court of Appeals unanimously allowed the Company's appeal, reversing the district court decision and remanding the matter back to the district court for a complete reduction of the judgement against the Company. On July 17, 2025, the trustee for the wrongful death trust petitioned the U.S. Eighth Circuit Court of Appeals for a rehearing. On August 7, 2025, the U.S. Eighth Circuit Court of Appeals denied the petition for a rehearing. The deadline for any petition to the U.S. Supreme Court for certiorari passed in November 2025 and no petition was filed. At this stage of the proceedings, any potential responsibility and the quantum of potential losses cannot be determined. Nevertheless, the Company denies liability and is vigorously defending these proceedings. Court decision related to Remington Development Corporation legal claim On October 20, 2022, the Court of King's Bench of Alberta issued a decision in a claim brought by Remington Development Corporation ("Remington") against the Company and the Province of Alberta ("Alberta") with respect to an alleged breach of contract by the Company in relation to the sale of certain properties in Calgary. In its decision, the Court found the Company had breached its contract with Remington and Alberta had induced the contract breach. The Court found the Company and Alberta liable for damages of approximately $164 million plus interest and costs, and subject to an adjustment to the acquisition value of the property. In a further decision on August 30, 2023, the Court determined that adjustment and set the total damages at $165 million plus interest and costs. On October 20, 2023, the Court determined the costs payable to Remington, however, the Court had not provided any indication of how the damages, which were estimated to total approximately $232 million as at June 30, 2025, should be apportioned between the Company and Alberta. On November 17, 2022, the Company filed an appeal of the Court's decision. On April 11, 2024, the Court of Appeal of Alberta ("ABCA") stayed the judgement pending the outcome of the appeal. On September 10, 2024, the ABCA heard the Company's appeal and reserved its decision. On July 2, 2025, the ABCA unanimously allowed the Company's appeal and set aside the trial judgement and costs order. A majority of the ABCA ordered a new trial in the Court of King's Bench. On September 26, 2025, Remington sought leave to appeal the ABCA's decision to the Supreme Court of Canada. On July 2, 2026, the Supreme Court of Canada dismissed Remington's application for leave to appeal the ABCA's decision. 2014 tax assessment On April 13, 2022, the Servicio de Administracion Tributaria ("SAT") delivered an audit assessment of CPKCM's 2014 tax returns (the "2014 Assessment"). As at June 30, 2026, the 2014 Assessment, including inflation, interest, and penalties was Mexican Pesos ("Ps.") 6,667 million ($540 million). On July 7, 2022, CPKCM filed an administrative appeal (the "Administrative Appeal") before the SAT, seeking to revoke the 2014 Assessment on the basis that the SAT's notification of the 2014 Assessment through the tax mailbox was not legal, because it was in violation of a tax mailbox injunction previously granted to CPKCM on March 19, 2015. On September 26, 2022, the SAT dismissed the Administrative Appeal, on the basis that it was not a timely submission (the "Administrative Appeal Resolution"). On October 10, 2022, CPKCM submitted an annulment lawsuit (the "Annulment Lawsuit") before the Federal Administrative Court (the "Administrative Court"), challenging the 2014 Assessment, its notification, and the Administrative Appeal Resolution. On April 24, 2024, the Administrative Court resolved the Annulment Lawsuit, confirming the Administrative Appeal Resolution and the 2014 Assessment (the "Administrative Court Resolution"). On June 21, 2024, CPKCM challenged the Administrative Court Resolution by submitting an Amparo appeal (Demanda de Amparo) before the Collegiate Circuit Courts (Tribunales Colegiados de Circuito). On June 4, 2025, the Twenty Third Collegiate Court of the First Circuit (the "Circuit Court") unanimously granted CPKCM's Amparo petition, vacating the prior decision and sending the matter back to the Administrative Court with an order to issue a new resolution addressing CPKCM's arguments that were presented in the Annulment Lawsuit. On June 25, 2025, the Administrative Court resolved the Annulment Lawsuit unfavourably to CPKCM (the "2025 Administrative Court Resolution"). On August 19, 2025, CPKCM submitted a new Amparo appeal challenging the 2025 Administrative Court Resolution. On September 8, 2025, the Circuit Court admitted the Amparo appeal submitted by CPKCM. CPKCM expects to prevail based on the technical merits of its case. On August 20, 2025, derived from the submission of the Amparo appeal, the Administrative Court issued a resolution granting an injunction against the enforcement and collection of the 2014 Assessment, as long as the 2014 Assessment is duly guaranteed. On March 24, 2026, CPKC filed with the International Centre for Settlement of Investment Disputes ("ICSID") a Request for Arbitration against the United Mexican States, under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ("CPTPP"), for the actions taken by the SAT in connection with the 2014 Assessment. On April 27, 2026, the ICSID registered the Request for Arbitration filed by the Company, which is a procedural step taken to preserve CPKCM's legal rights under the CPTPP. Environmental liabilities Environmental remediation accruals, recognized on an undiscounted basis unless a reliable, determinable estimate as to an amount and timing of costs can be established, cover site-specific remediation programs. The accruals for environmental remediation represent the Company's best estimate of its probable future obligation and include both asserted and unasserted claims, without reduction for anticipated recoveries from third parties. Although the recognized accruals include the Company's best estimate of all probable costs, the Company's total environmental remediation costs cannot be predicted with certainty. Accruals for environmental remediation may change from time to time as new information about previously untested sites becomes known, and as environmental laws and regulations evolve and advances are made in environmental remediation technology. The accruals may also vary as the courts decide legal proceedings against outside parties responsible for contamination. These potential charges, which cannot be quantified at this time, may materially affect income in the particular period in which a charge is recognized. Costs related to existing, but as yet unknown, or future contamination will be accrued in the period in which they become probable and reasonably estimable. Provisions for environmental remediation costs are recognized in the Company's Interim Consolidated Balance Sheets in "Other long-term liabilities", except for the current portion, which is recognized in "Accounts payable and accrued liabilities". The total amount provided as at June 30, 2026 was $248 million (December 31, 2025 - $241 million). Payments are expected to be made over 10 years through 2035. Summary of Rail Data Summary of Rail Data (Continued) Summary of Rail Data (Continued) Summary of Rail Data (Continued) Non-GAAP Measures The Company presents Non-GAAP measures to provide a basis for evaluating underlying earnings and liquidity trends in the Company's current period's financial results that can be compared with the results of operations in prior periods. Management believes these Non-GAAP measures facilitate a multi-period assessment of long-term profitability. These Non-GAAP measures have no standardized meanings and are not defined by accounting principles generally accepted in the United States of America ("GAAP") and, therefore, may not be comparable to similar measures presented by other companies. The presentation of these Non-GAAP measures is not intended to be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP. Non-GAAP Performance and Liquidity Measures The Company uses Core adjusted operating income, Core adjusted operating ratio, Core adjusted income, and Core adjusted diluted earnings per share ("EPS") to evaluate the Company's operating performance and for planning and forecasting future business operations and future profitability. In addition to the Non-GAAP performance measures noted above, other Non-GAAP liquidity measures include Adjusted free cash and Adjusted net debt to adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA") ratio. Management believes these Non-GAAP measures provide meaningful supplemental information about our financial results and improved comparability to past performance because they exclude certain significant items that are not considered indicative of future or past financial trends either by nature or amount. As a result, these items are excluded for management's assessment of operational performance, allocation of resources, and preparation of annual budgets. These significant items may include, but are not limited to, restructuring and asset impairment charges, individually significant gains and losses from sales of assets or equity investments, acquisition-related costs, certain adjustments to provisions and settlements of Mexican taxes, advisory costs related to rail consolidation matters, discrete tax items, changes in income tax rates, changes to uncertain tax items, and certain items that are not typical of normal business activities or are outside the control of management. Acquisition-related costs include legal, consulting, integration costs including third-party services and system migration, restructuring and special termination benefit costs, employee retention, and synergy incentive costs. These items may not be non-recurring and may include items that are settled in cash. Specifically, due to the magnitude of the Kansas City Southern ("KCS") acquisition, its significant impact to the Company's business and complexity of integrating the acquired business and operations, the Company continues to expect to incur acquisition-related costs. Management believes excluding these significant items from GAAP results provides an additional viewpoint which may give users a consistent understanding of the Company's financial performance when performing a multi-period assessment including assessing the likelihood of future results. Accordingly, these Non-GAAP financial measures may provide additional insight to investors and other external users of the Company's financial information. In addition, these Non-GAAP measures exclude KCS purchase accounting. KCS purchase accounting represents the amortization of basis differences being the incremental depreciation or amortization in relation to fair value adjustments to properties, intangible assets, and KCS's investments, the change in fair value of debt of KCS assumed on April 14, 2023 (the "Control Date"), and fair value adjustments that are attributable to the non-controlling interest, as recognized within "Depreciation and amortization", "Purchased services and other", "Other (income) expense", "Net interest expense", and "Net loss attributable to non-controlling interest", respectively, in the Company's Interim Consolidated Statements of Income. All assets subject to KCS purchase accounting contribute to income generation and will continue to amortize over their estimated useful lives. Excluding KCS purchase accounting from GAAP results provides financial statement users with additional transparency by isolating the impact of KCS purchase accounting. Significant items recognized in "Net income attributable to controlling shareholders" as reported on a GAAP basis for the first six months of 2026, the year ended December 31, 2025, and the last six months of 2024 were as follows: 2026: during the first six months, acquisition-related costs of $36 million in connection with the KCS acquisition ($27 million after current income tax recovery of $9 million) including $25 million recognized in "Compensation and benefits" primarily related to synergy related incentive compensation and restructuring costs, and $11 million recognized in "Purchased services and other" primarily related to system migration, legal fees, and other third party purchased services, that unfavourably impacted Diluted EPS by 3 cents as follows: during the first six months, advisory costs related to the analysis and advocacy in connection with the STB's review of the proposed merger between Union Pacific Corporation and Norfolk Southern Corporation of $27 million ($21 million after current income tax recovery of $6 million) recognized in "Purchased services and other", that unfavourably impacted Diluted EPS by 2 cents as follows: 2025: during the course of the year, a gain on sale of an equity investment of $333 million ($256 million after current income tax expense of $102 million net of deferred income tax recovery of $25 million) recognized in "Gain on sale of equity investment", that favourably impacted Diluted EPS by 27 cents as follows: during the course of the year, acquisition-related costs of $72 million in connection with the KCS acquisition ($56 million after current income tax recovery of $16 million), including $11 million recognized in "Compensation and benefits" primarily related to synergy related incentive compensation and restructuring costs, $1 million recognized in "Materials", $51 million recognized in "Purchased services and other" primarily related to system migration, legal fees, and other third party purchased services, and $9 million recognized in "Other components of net period benefit recovery" related to special termination benefit costs, that unfavourably impacted Diluted EPS by 6 cents as follows: 2024: in the fourth quarter, a deferred income tax recovery of $78 million due to a decrease in the Louisiana state corporate income tax rate, that favourably impacted Diluted EPS by 9 cents; during the last six months, adjustments to provisions and settlements of Mexican taxes of $14 million recovery ($12 million after deferred income tax expense of $2 million) recognized in "Compensation and benefits", that favourably impacted Diluted EPS by 1 cent as follows: during the last six months, acquisition-related costs of $58 million in connection with the KCS acquisition ($43 million after current income tax recovery of $15 million), including $12 million recognized in "Compensation and benefits" primarily related to retention and synergy related incentive compensation costs; $2 million recognized in "Materials"; and $44 million recognized in "Purchased services and other" primarily related to system migration, relocation expenses, legal and consulting fees, that unfavourably impacted Diluted EPS by 5 cents as follows: KCS purchase accounting recognized in "Net income attributable to controlling shareholders" as reported on a GAAP basis for the first six months of 2026, the year ended December 31, 2025 and the last six months of 2024 was as follows: 2026: during the first six months, KCS purchase accounting of $184 million ($134 million after deferred income tax recovery of $50 million), including costs of $175 million recognized in "Depreciation and amortization", $1 million recognized in "Purchased services and other" related to the amortization of equity investments, $11 million recognized in "Net interest expense", and a recovery of $3 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by 15 cents as follows: 2025: during the course of the year, KCS purchase accounting of $391 million ($285 million after deferred income tax recovery of $106 million), including costs of $373 million recognized in "Depreciation and amortization", $3 million recognized in "Purchased services and other" related to the amortization of equity investments, $21 million recognized in "Net interest expense", $1 million recognized in "Other (income) expense", and a recovery of $7 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by 31 cents as follows: 2024: during the last six months, KCS purchase accounting of $182 million ($133 million after deferred income tax recovery of $49 million), including $172 million recognized in "Depreciation and amortization", $1 million recognized in "Purchased services and other" related to the amortization of equity investments, $10 million recognized in "Net interest expense", $2 million recognized in "Other (income) expense", and a recovery of $3 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by 15 cents as follows: Reconciliation of GAAP Performance Measures to Non-GAAP Performance Measures The following tables reconcile the most directly comparable measures presented in accordance with GAAP to the Non-GAAP measures: Core Adjusted Income and Core Adjusted Diluted EPS Core adjusted income is calculated as Net income attributable to controlling shareholders reported on a GAAP basis adjusted for significant items and KCS purchase accounting. Core adjusted diluted EPS is calculated using Diluted EPS reported on a GAAP basis adjusted for significant items and KCS purchase accounting. Core Adjusted Operating Income and Core Adjusted Operating Ratio Core adjusted operating income and Core adjusted operating ratio are calculated from reported GAAP revenue and operating expenses adjusted for, where applicable, (1) significant items (acquisition-related costs and advisory costs related to rail consolidation matters) that are reported within Operating income, and (2) KCS purchase accounting recognized in "Depreciation and amortization" and "Purchased services and other". FX Adjusted % Change FX adjusted % change allows certain financial results to be viewed without the impact of fluctuations in FX rates, thereby facilitating period-to-period comparisons in the analysis of trends in business performance. Financial result variances at constant currency are obtained by translating the comparable period of the prior year's results denominated in U.S. dollars and Mexican pesos at the FX rates of the current period. FX adjusted % changes in revenues are also used in calculating FX adjusted % change in Freight revenue per carload and per RTM. FX adjusted % changes in revenues are as follows: FX adjusted % changes in Operating expenses are as follows: FX adjusted % change in Operating income is as follows: Reconciliation of GAAP Liquidity Measures to Non-GAAP Liquidity Measures Adjusted Free Cash Adjusted free cash is calculated as Net cash provided by operating activities, less Net cash used in investing activities, adjusted for changes in Cash and cash equivalents balances resulting from FX rate fluctuations, the cash flow impacts of acquisition-related costs associated with the KCS acquisition, certain settlements of Mexican taxes, advisory costs related to rail consolidation matters and net proceeds from the sale of an equity investment, net of tax which are not indicative of operating trends. Adjusted free cash is useful to investors and other external users of the Company's Interim Consolidated Financial Statements as it assists with the evaluation of the Company's ability to generate cash to satisfy debt obligations and other activities such as dividends, share repurchase programs, and other strategic opportunities, and is an important performance criterion in determining certain elements of the Company's long-term incentive plan. Adjusted free cash should be considered in addition to, rather than as a substitute for, Net cash provided by operating activities. Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Adjusted Net Debt to Adjusted EBITDA Ratio Adjusted net debt to adjusted EBITDA ratio is calculated as Adjusted net debt divided by Adjusted EBITDA. The Adjusted net debt to adjusted EBITDA ratio is a key credit measure used to assess the Company's financial capacity. The ratio provides information on the Company's ability to service its debt and other long-term obligations from operations, excluding significant items. The Adjusted net debt to adjusted EBITDA ratio which is reconciled below from the Long-term debt to Net income attributable to controlling shareholders ratio, the most comparable measure calculated in accordance with GAAP. Calculation of Long-term Debt to Net Income Attributable to Controlling Shareholders Ratio The Long-term debt to Net income attributable to controlling shareholders ratio is calculated as Long-term debt, including Long-term debt maturing within one year, divided by Net income attributable to controlling shareholders. Reconciliation of Long-term Debt to Adjusted Net Debt Adjusted net debt is defined as Long-term debt and Long-term debt maturing within one year, as reported on the Company's Interim Consolidated Balance Sheets adjusted for pension plans' deficit, operating lease liabilities, Cash and cash equivalents, and the fair value adjustment to KCS debt on the Control Date which is recognized under Long-term debt on the Company's Interim Consolidated Balance Sheets. Adjusted net debt is used as a measure of debt and long-term obligations as part of the calculation of Adjusted net debt to Adjusted EBITDA. Reconciliation of Net Income Attributable to Controlling Shareholders to Adjusted EBITDA Adjusted EBITDA is calculated as Net income attributable to controlling shareholders before Net interest expense, Income tax expense, Depreciation and amortization, and Operating lease expense recognized on the Company's Interim Consolidated Statement of Income, excluding significant items reported in "Net income", less "Other components of net periodic benefit recovery" recognized on the Company's Interim Consolidated Statement of Income. Adjusted EBITDA is used as a performance measure derived from operating results, excluding significant items, as part of the calculation of Adjusted net debt to adjusted EBITDA. Detailed quarterly information on significant items that occurred within the 12 months ended June 30, 2026 and 2025 can be found under the earlier section Core Adjusted Income and Core Adjusted Diluted EPS. Calculation of Adjusted Net Debt to Adjusted EBITDA Ratio View original content to download multimedia:https://www.prnewswire.com/news-releases/cpkc-reports-strong-q2-results-poised-for-accelerated-growth-in-second-half-of-2026-302838199.html View original content to download multimedia: http://www.newswire.ca/en/releases/archive/July2026/29/c5802.html

Canadian Pacific Kansas City (CP) came out with quarterly earnings of $0.92 per share, beating the Zacks Consensus Estimate of $0.89 per share. This compares to earnings of $0.81 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +3.37%. A quarter ago, it was expected that this railroad would post earnings of $0.78 per share when it actually produced earnings of $0.76, delivering a surprise of -2.56%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Canadian Pacific Kansas City, which belongs to the Zacks Transportation - Rail industry, posted revenues of $3.01 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.26%. This compares to year-ago revenues of $2.67 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Canadian Pacific Kansas City shares have added about 24.5% since the beginning of the year versus the S&P 500's gain of 8.5%. While Canadian Pacific Kansas City has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Canadian Pacific Kansas City was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.94 on $2.91 billion in revenues for the coming quarter and $3.69 on $11.53 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Transportation - Rail is currently in the top 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the broader Zacks Transportation sector, Global Ship Lease (GSL), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This containership owner is expected to post quarterly earnings of $2.34 per share in its upcoming report, which represents a year-over-year change of -12.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Global Ship Lease's revenues are expected to be $192.97 million, up 0.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Canadian Pacific Kansas City Limited (CP) : Free Stock Analysis Report Global Ship Lease, Inc. (GSL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Canadian Pacific Kansas City CP is scheduled to report second-quarter 2026 results on July 29, after the market close. The Zacks Consensus Estimate for CP’s second-quarter 2026 earnings has been revised southward by 2.2% over the past 60 days to 89 cents per share. The consensus mark indicates a 9.9% increase from the second-quarter 2025 actuals. The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $2.91 billion, indicating a 9% increase from the second-quarter 2025 actuals. Canadian Pacific has a discouraging earnings surprise history, wherein its earnings have underperformed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average miss of 2.26%. Canadian Pacific Kansas City Limited price-eps-surprise | Canadian Pacific Kansas City Limited Quote We expect CP’s performance in the to-be-reported quarter to have been adversely impacted by the downturn in the freight market demand and lower volumes. Rising operating expenses, along with ongoing geopolitical tensions in the Middle East and supply-chain disruptions, are likely to have materially affected CP’s performance in the March-end quarter. Carloads from Coal, Forest products, Energy & chemicals and intermodal are expected to have decreased 21.3%, 6%, 6% and 0.9%, respectively, on a year over year basis in the second quarter of 2026. On the contrary, the Zacks Consensus Estimate for total revenues ton miles (RTMs) is likely to have improved 3.8% year over year in the to-be-reported quarter. This improvement is expected to have been driven by a rise in freight revenues across key sub-groups like Grain, Potash and Metals, which are anticipated to have increased 19.5%, 10.6% and 5.7%, respectively, on a year-over-year basis. Our proven model does not conclusively predict an earnings beat for Canadian Pacific this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover before they’re reported with our Earnings ESP Filter. CP has an Earnings ESP of -0.74% and a Zacks Rank #4 (Sell) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. CP reported unimpressive first-quarter 2026 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. Quarterly earnings (excluding 7 cents from non-recurring items) of 76 cents per share missed the Zacks Consensus Estimate of 78 cents. The bottom line improved 2.7% on a year-over-year basis. Operating revenues of $2.69 billion lagged the Zacks Consensus Estimate of $2.71 billion. However, the top line improved 2.1% on a year-over-year basis. Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle. Schneider National SNDR has an Earnings ESP of +1.50% and a Zacks Rank #2 at present. SNDR is scheduled to report second-quarter 2026 earnings on July 30. The Zacks Consensus Estimate for second-quarter 2026 earnings has remained flat at 22 cents over the past 60 days. SNDR’s earnings beat the Zacks Consensus Estimate in one of the preceding four quarters (missing the mark twice and met the mark once in the remaining three quarters). The average miss is 17.97%. Allegiant Travel Company ALGT has an Earnings ESP of +34.29% and a Zacks Rank #2 at present. ALGT is scheduled to report second-quarter 2026 earnings on Aug. 4 The Zacks Consensus Estimate for second-quarter 2026 earnings has been revised upwards by more than 100% over the past 60 days to 95 cents. ALGT’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters (missing the mark in the remaining quarter). The average beat being 21.94%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Canadian Pacific Kansas City Limited (CP) : Free Stock Analysis Report Allegiant Travel Company (ALGT) : Free Stock Analysis Report Schneider National, Inc. (SNDR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Analysts on Wall Street project that Canadian Pacific Kansas City (CP) will announce quarterly earnings of $0.89 per share in its forthcoming report, representing an increase of 9.9% year over year. Revenues are projected to reach $2.91 billion, increasing 9% from the same quarter last year. The current level reflects a downward revision of 0.7% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period. Ahead of a company's earnings disclosure, it is crucial to give due consideration to changes in earnings estimates. These revisions serve as a noteworthy factor in predicting potential investor reactions to the stock. Numerous empirical studies consistently demonstrate a strong relationship between trends in earnings estimate revision and the short-term price performance of a stock. While investors typically use consensus earnings and revenue estimates as indicators of quarterly business performance, exploring analysts' projections for specific key metrics can offer valuable insights. That said, let's delve into the average estimates of some Canadian Pacific Kansas City metrics that Wall Street analysts commonly model and monitor. The consensus estimate for 'Core adjusted operating ratio' stands at 61.6%. The estimate compares to the year-ago value of 60.7%. The combined assessment of analysts suggests that 'Carloads - Total' will likely reach 1.15 million. Compared to the current estimate, the company reported 1.15 million in the same quarter of the previous year. According to the collective judgment of analysts, 'Carloads - Automotive' should come in at 64.07 thousand. Compared to the current estimate, the company reported 62.40 thousand in the same quarter of the previous year. Analysts predict that the 'Revenue ton miles (RTMs) - Total' will reach 57.65 billion. Compared to the current estimate, the company reported 55.53 billion in the same quarter of the previous year. It is projected by analysts that the 'Revenue ton-miles (RTMs) - Intermodal' will reach 10.27 billion. Compared to the present estimate, the company reported 10.26 billion in the same quarter last year. Analysts forecast 'Carloads - Grain' to reach 168.96 thousand. The estimate compares to the year-ago value of 142.60 thousand. Based on the collective assessment of analysts, 'Carloads - Coal' should arrive at 93.33 thousand. The estimate is in contrast to the year-ago figure of 118.60 thousand. Analysts expect 'Carloads - Potash' to come in at 51.75 thousand. The estimate is in contrast to the year-ago figure of 47.40 thousand. Analysts' assessment points toward 'Carloads - Fertilizers and sulphur' reaching 16.25 thousand. The estimate compares to the year-ago value of 15.60 thousand. The collective assessment of analysts points to an estimated 'Carloads - Forest products' of 30.84 thousand. The estimate is in contrast to the year-ago figure of 32.80 thousand. The average prediction of analysts places 'Carloads - Energy, chemicals and plastics' at 134.12 thousand. Compared to the present estimate, the company reported 142.70 thousand in the same quarter last year. The consensus among analysts is that 'Carloads - Metals, minerals and consumer products' will reach 132.48 thousand. Compared to the current estimate, the company reported 125.40 thousand in the same quarter of the previous year. View all Key Company Metrics for Canadian Pacific Kansas City here>>> Over the past month, Canadian Pacific Kansas City shares have recorded returns of +6.1% versus the Zacks S&P 500 composite's +0.6% change. Based on its Zacks Rank #4 (Sell), CP will likely underperform the overall market in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> . Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Canadian Pacific Kansas City Limited (CP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research