Oct 28, 2026 earnings call — Quarter results, operations and Elk Valley expansion
CPKC reported third quarter revenue of $4.2 billion and 6% volume growth, with a core adjusted operating ratio of 61.9%.
Revenue $3.0B (est $3.0B) · EPS $0.91 (est $0.94)
Key quotes
"Train speed improved 8%, dwell improved 7%, car miles per car day increased 10%, locomotive productivity up 4%, fuel efficiency improved 3%."
"We also announced a meaningful expansion of our relationship with Elk Valley Resources to move their product from the mines that we serve in Southeastern British Columbia to Vancouver for global export."
"Year-to-date net cash provided by operating activities is up 12%, while adjusted free cash flow increased 59% to $2.4 billion."
Analyst Q&A 11
Elk Valley coal haulage change
Q (Steven Hansen · Raymond James): Analyst asked for more color on the new Elk Valley agreement, CP's higher share of haulage, growth under the new term, and whether Neptune investments influenced the deal.
A: Management said the prior contract introduced an interchange at Kamloops that added complexity and reliability risk. About half of the traffic that previously interchanged to CN at Kamloops will be reclaimed to CP origin-to-destination, eliminating the interchange. That change equals about 1.5 trains shifting back to CP's route.
"So about 1.5 trains will flip back to CP's route cradle to grave." — Keith Creel (CEO)
pricing outlook and renewals
Q (Brian Ossenbeck · JPMorgan): Analyst asked how management thinks about pricing opportunity ahead, balancing volume growth and network resources, and whether to expect mid-single digit price increases given inflation and fuel surcharge timing.
A: Management said they are bullish on pricing and the commercial team remains disciplined. Renewals are running about 3% to 4% or more in some cases, and they are staying aggressive while watching fuel surcharge dynamics. They have a favorable outlook into early 2027.
"I'd just be candid, renewals continue to be that 3% to 4%, or even more in some cases." — John Brooks (CMO)
growth areas: grain, Mexico, intermodal
Q (Fadi Chamoun · BMO): Analyst asked which verticals drive the deep pipeline over the next 12–24 months and for a high-level view of RTM growth for 2027 given grain and coal visibility.
A: Management would not provide a 2027 RTM guide but listed many opportunities. They cited continued upside in the grain franchise, growth in southern network and Mexico, the crush market, domestic intermodal and truck-to-rail conversion, international wins and Saint John investments, and Lázaro growth tied to trade diversion. Keith added that the Lázaro route to Houston and the Midwest gives shippers a reliable alternative, and Mark said capacity (locomotives, crews) is in place to support growth.
"We continue to uncover more and more opportunities into the southern part of our network and growth into Mexico and driving efficiency there." — John Brooks (CMO)
Q4 momentum and outlook
Q (Jonathan Chappell · Evercore): Analyst asked about momentum for the rest of the fourth quarter given positives in auto, potash, and grain carryout, noting current RTM running about 5.5%.
A: Management said they will push hard and that markets have ups and downs. Bulk, domestic intermodal, and international look pretty good, while automotive has been rough but should see better compares; merchandise and forest products have battled through issues. They are optimistic they can close the quarter strong but declined to give a number.
"So I'm not going to give you a number, but I'm optimistic that we can close pretty strong." — John Brooks (CMO)
grain outlook and capacity/CapEx
Q (Ken Hoexter · BofA): Analyst asked whether grain volumes next year will fall (and by how much) and whether CP has the capacity and capital to sustain mid- to upper single-digit RTM growth or if CapEx must rise in 2027.
A: John said the crop looks like it may narrow to about 76 million to 78 million metric tons, roughly an 8% decline versus last year, though some southern growing areas improved and early customer signals are bullish. Keith reminded listeners CP committed to build the network for high single-digit RTM growth and has locomotives, cars, terminals and track capacity in place. Nadeem said this year's CapEx will finish around $2.65 billion and long-term guidance remains $2.6 billion to $2.8 billion.
"But outside of that, we've guided long term $2.6 billion to $2.8 billion range of CapEx." — Nadeem Velani (CFO)
modeling Elk Valley coal volumes
Q (Walter Spracklin · RBC): Analyst asked how to model Elk Valley volumes next year given mine outages, recapturing half the lost traffic from CN, and whether coal could be up ~20% year-over-year.
A: Management said volumes are hard to predict and there are moving parts; Elk Valley has improved but faced mine challenges. John estimated Elk Valley volumes will likely end the year about 15% plus down in tonnage year-over-year and said it's early to know 2027 tonnage. He added they feel good about the added 1.5 trains to Neptune and Westshore's long-term agreement, which together support a good growth story once tonnage is nailed down.
"I think if you look at year-over-year, their volumes overall probably going to end up 15% plus down in terms of tonnage." — John Brooks (CMO)
deal revenue/volume premium expectation
Q (Christian Wetherbee · Wells Fargo): Analyst asked whether the transaction still implies a 2–3 point revenue or volume premium for the combined company looking into 2027–2028.
A: Management said the expectation internally is to beat peers by 1 to 2 points consistently. They noted the team will keep pushing and that if macro conditions turn favorable, that would add tailwind. They remain confident there are opportunities to deliver outperformance vs. peers.
"I can tell you the expectation in the room is, yes, we're going to beat by 1 to 2 points consistently." — John Brooks (CMO)
energy projects and nation building impact
Q (Benoit Poirier · Desjardins): Analyst asked for an update on how energy projects are performing and whether management can quantify longer-term upside from nation building projects for the company.
A: Management said they are working with major project offices on several opportunities and see alignment on potential redevelopment in Vancouver's South Shore, but it is too early to quantify. John highlighted the Saint John project from the trade diversification corridor fund as the first such project and said it is a big part of the growth profile for 2027 to 2030.
"I can tell you, it's a big part of our growth profile as you look at, let's say, 2027 to 2030." — John Brooks (CMO)
M&A filing content and concerns
Q (Brandon Oglenski · Barclays): Analyst asked what was in CP's responsive request filed last month and for comment on statements from Kloster and the applicants' behavior.
A: Management said their filing asks for complete rejection and, if the STB approves, for targeted protections that meaningfully protect gateways and shipper access. He argued applicants misrepresented facts, that Canada and U.S. situations differ (including regulatory differences), and that the process has been compromised by conduct that chilled customer testimony.
"That being said, what you're going to see in our filing, again, not a Santa Claus list, but protections over gateways that are meaningful that, to this point, the applicants have not offered" — Keith Creel (CEO)
Q4 operating ratio and Teck impact
Q (Scott Group · Wolfe): Analyst asked for color on near-term operating ratio in Q4 and whether getting about half of prior Teck revenue loss back is a fair way to think about it.
A: Nadeem said the Teck revenue ballpark of $100 million–$150 million prior loss with about half recovering is fair depending on Elk Valley volumes. He noted some headwind year-over-year from fuel timing, but October volumes started extremely strong. He feels very comfortable finishing the year with a sub-60 operating ratio given volumes and network performance.
"I feel very comfortable we'll have a sub-60 OR in Q4 given the volume environment, given, as Mark mentioned, how well the network is running." — Nadeem Velani (CFO)
fuel impact per RTM and price sensitivity
Q (Konark Gupta · Scotiabank): Analyst asked for cents per RTM expectations in Q4 related to fuel impact and whether management sees dislocations in price-sensitive markets due to fuel-driven inflation.
A: John said they are seeing fuel-driven effects in certain areas, with customers managing shipments month-to-month and exploring alternatives. Nadeem said year-over-year cents per RTM are up a high single-digit amount while RTMs are up a little over 6%, which together are producing significant revenue growth so far.
"So RTMs as of yesterday are up a little over 6%, high single-digit cents per RTM improvement year-over-year, you get pretty significant revenue growth." — Nadeem Velani (CFO)