Third-Quarter Revenues Rise Six Percent to $3.5 Billion
In a significant boost to the company’s financial performance, Canadian Pacific Kansas City Ltd.’s (CPKC) third-quarter revenues surged six percent to $3.5 billion from a year ago, exceeding analyst expectations of around $2.6 billion for the quarter despite a labour shutdown and a major train derailment.
Labour Dispute and Derailment Challenges Overcome
The Calgary-based railway’s ability to overcome the challenges posed by a four-day work stoppage due to a labour dispute with the Teamsters Canada Rail Conference (TCRC) and a major train derailment in early July in North Dakota is a testament to the company’s operational resilience.
CPKC Chief Executive Keith Creel Praises Operations Staff
In a call with investors, CPKC chief executive Keith Creel attributed the railway’s performance to the work of its operations staff. "The network responded well," he said, highlighting the company’s ability to navigate complex logistical challenges.
Net Income and Diluted Earnings Per Share
CPKC also reported net income for the quarter was $837 million, up from $780 million in 2023. Additionally, diluted earnings per share were 90 cents, up from 84 cents in the same period last year.
Analysts Praise CPKC’s Performance
Analysts at Desjardins Securities Inc. noted that while CKPC’s broad earnings-per-share target was left unchanged, they view the expected volume increase as a positive development for the company. Raymond James Ltd. analysts also pointed out that the higher stock-based compensation during the quarter and the four-day work stoppage did not significantly impact the company’s performance.
Safety Improvements and Sustainability Commitment
CPKC senior leadership highlighted several positive developments, including a lower number of reported accidents on its network for the quarter (a 17 percent decrease) and personal injuries (an eight percent decrease). Creel also emphasized the company’s commitment to sustainability by showcasing the first test of a high-horsepower hydrogen locomotive, which successfully hauled both loaded and empty bulk trains.
Uncertainty Over Possible Tariffs
In response to questions about potential tariffs on imported goods under a new presidential administration in the United States, CPKC’s chief marketing officer John Brooks stated that the company is taking a wait-and-see approach. "We’ll navigate whatever those tariffs may or may not look like as we move into the future," he said.
CPKC Well Positioned for Future Growth
Despite the challenges faced during the quarter, CPKC’s leadership expressed confidence in the company’s ability to deliver strong results in the fourth quarter of 2024. With a robust operational performance and commitment to sustainability, Canadian Pacific Kansas City Ltd. appears well-positioned for future growth and success.
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