Latest news with #CanadianPacificKansasCityLtd
Ottawa Citizen
02-05-2025
- Business
- Ottawa Citizen
CN Rail holds firm on financial outlook amid tariff uncertainty
Article content Canada's largest railway says there is a higher risk of recession in both Canada and the United States due to the trade war initiated by U.S. President Donald Trump, but it hasn't impacted its outlook yet. Article content Article content 'There's no question that uncertainty has increased over the last few months and we're seeing a heightened risk of recession in both Canada and the U.S.,' Canadian National Railway Co. chief executive Tracy Robinson said during a first-quarter earnings call with analysts. 'The resiliency we saw is again proof that our operating model is the right one for this railroad.' Article content Article content The Montreal-based railway reported revenues of $4.4 billion in the first quarter, which is up four per cent from the $4.25 billion recorded a year ago, and net income of $1.16 billion, an increase from $1.1 billion in the same timeframe. Article content Article content Strong grain and fertilizer shipping, along with coal and petrochemicals, primarily drove revenue growth for CN Rail. Currently, its volumes are not being impacted by the uncertainty created by tariffs and other trade-related issues, but Robinson said this may not be the case in the near future. Article content Nevertheless, the railway is still expecting to deliver earnings per share growth of 10 per cent to 15 per cent, while rival Canadian Pacific Kansas City Ltd. lowered its outlook on Wednesday. Article content Robinson said CN Rail is optimistic that the U.S. will be able to reach new trade agreements with Canada, China other countries and is projecting year-over-year volume growth. Article content 'CN is well positioned to enable global trade regardless of potential changes in trade patterns,' she said. Article content Article content Remi Lalonde, CN Rail's chief commercial officer, said many customers are taking a wait-and-see approach with regards to tariffs, and there are some sectors of the railway's business being impacted since some companies are pausing shipments to avoid tariffs, reducing production or building inventory. Article content Article content 'The tariffs are starting to bite and we're seeing that in the intermodal business,' he said. 'We're taking a bit more of a cautious approach to some of the other segments, the metals and mining, the autos in particular.' Article content CN Rail also reached an agreement with its Canadian train operators and conductors through arbitration during the first quarter. Article content Robinson said the agreement is for three years with annual wage increases of three per cent, which she said was in line with the company's expectations. She said progress has also been made in reaching agreements with workers within the company's U.S. operations.
Yahoo
01-05-2025
- Business
- Yahoo
Canadian Pacific Kansas City Ltd (CP) Q1 2025 Earnings Call Highlights: Strong Revenue Growth ...
Revenue: $3.8 billion, up 8%. Volume Growth: 4% increase. Operating Ratio: 62.5%, a 150-basis point improvement. Earnings Growth: 14%, producing $1.06 of earnings per share. Freight Revenue Growth: 9% on a 4% increase in RTMs. Grain Revenue: Up 4% on 3% volume growth. Potash Revenue: Up 10% with 8% volume growth. Coal Revenue: Up 21% on 10% volume growth. Automotive Revenue: Up 18% with 24% volume growth. Domestic Intermodal Volume: Up 8%. Cash Provided by Operating Activities: Increased 14% to approximately $1.2 billion. Capital Expenditure (CapEx): $711 million in the quarter. Adjusted Free Cash Flow: $466 million for the quarter. Share Buyback Program: New 4% share repurchase program announced. Dividend Increase: 20% increase in quarterly dividend. Warning! GuruFocus has detected 6 Warning Signs with CP. Release Date: April 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Canadian Pacific Kansas City Ltd (NYSE:CP) reported a strong revenue growth of 8% in the first quarter, reaching $3.8 billion. The company achieved a 150-basis point improvement in its operating ratio, now at 62.5%. CP experienced a record performance in safety, with significant improvements in train accidents and personal injuries. The company announced a 20% increase in its quarterly dividend, reflecting strong shareholder returns. CP is leveraging its unique three-nation network to create new trade opportunities, particularly between Canada and Mexico, which has resulted in over $100 million of new revenue. There is macroeconomic uncertainty, including trade policy and currency fluctuations, which has led CP to adjust its guidance. The company faces potential risks from tariffs, particularly in the automotive and steel sectors. CP's US grain volumes were down 5% due to reduced export volumes. The company is experiencing a headwind from a stronger Canadian dollar, impacting its earnings guidance. There are concerns about potential impacts on volume growth due to evolving trade policies and tariffs. Q: Are Canadian ports expected to gain share from US ports due to tariffs, and what percentage of your business is tariff-exposed? A: John Brooks, EVP and Chief Marketing Officer, explained that Canadian Pacific Kansas City Ltd (CPKC) is uniquely positioned with strong international volumes, benefiting from partnerships like Gemini. Less than 1% of their business is exposed to tariffs, and they continue to see strong growth at ports like Lazaro, which has not been impacted by tariffs. Q: Why did you reduce EPS growth guidance while maintaining mid-single-digit RTM growth? A: Nadeem Velani, CFO, stated that the reduction in EPS growth guidance is primarily due to the appreciation of the Canadian dollar, which has a 2 percentage point impact on EPS. The company still anticipates mid-single-digit RTM growth. Q: How do you view the potential impact of tariffs on your US-Mexico business, and what opportunities do you see? A: Keith Creel, CEO, emphasized that while tariffs may impact certain markets like autos and steel, CPKC is focused on creating solutions and new trade flows, particularly between Canada and Mexico. The company has identified over $100 million in new revenue opportunities from this crisis. Q: What is the outlook for the OR (Operating Ratio) for 2025, and how do you plan to achieve it? A: Nadeem Velani, CFO, expects sequential improvement in the OR, aiming for a sub-60 OR for the year. This is supported by strong volume growth, efficient network operations, and favorable fuel prices. Q: How is the Gemini partnership performing, and what is its potential impact? A: John Brooks, EVP and Chief Marketing Officer, expressed strong enthusiasm for the Gemini partnership, which is off to a faster start than anticipated. The company is moving towards two trains a day at Centerm, driven by Gemini, and expects continued growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Mint
01-05-2025
- Business
- Mint
Trade War Leads Canadian Pacific Kansas City Railway to Lower 2025 Guidance
Canadian Pacific Kansas City Ltd. cut its financial outlook for this year due to the uncertainty caused by the US administration's tariff and trade policy. The Calgary-based company lowered its earnings per share growth expectations to between 10% and 14% from between 12% and 18% on an adjusted diluted basis. The railway, Canada's second largest, is highly exposed to the trade war due to its network stretching from Mexico to Canada. 'The increasing uncertainty created by evolving trade policies and the heightened risk of economic recession make it prudent to amend our 2025 earnings guidance at this time,' Chief Executive Officer Keith Creel said in a release. CPKC's shares dropped by more than 2% in after-hours trading in New York but then pared those losses. Revenues increased to C$3.8 billion in the first quarter, up by 7.8% from the same period last year, and adjusted diluted earnings per share rose by 14% to C$1.06. The company beat analyst estimates for both measures. The quarter was driven by higher freight revenues from grain, coal, potash, fertilizers and automotive. Duties on steel, aluminum and imported goods that don't comply with the North American free trade agreement were imposed during the quarter, but President Donald Trump's global reciprocal tariffs and levies on the auto sector hadn't yet been announced. CPKC said it has a responsibility to help customers diversify their markets. 'We stepped into this trade storm that we're facing to become market makers,' Creel said during a call with analysts. 'We're seeing opportunities with new trade flows between Canada and Mexico.' He expressed concerns about the automotive area, saying it 'presents some risk and choppiness.' 'The steel tariffs are an area that we're keenly focused on and working with our customers on alternatives,' Creel added. 'As I look ahead as we get to new crop in the harvest in the US, we'll certainly be watching how our soybean movements progress.' This article was generated from an automated news agency feed without modifications to text. First Published: 1 May 2025, 08:26 AM IST
Bloomberg
30-04-2025
- Business
- Bloomberg
Trade War Leads Canadian Pacific Kansas City Railway to Lower 2025 Guidance
Canadian Pacific Kansas City Ltd. cut its financial outlook for this year due to the uncertainty caused by the US administration's tariff and trade policy. The Calgary-based company lowered its earnings per share growth expectations to between 10% and 14% from between 12% and 18% on an adjusted diluted basis. The railway, Canada's second largest, is highly exposed to the trade war due to its network stretching from Mexico to Canada.
Global News
30-04-2025
- Business
- Global News
Calgary-based CPKC lowers financial forecast amid trade uncertainty
Canadian Pacific Kansas City Ltd. says it is reining in its financial forecast for the year due to uncertainty around U.S. tariffs and trade policy. The railway says it expects adjusted diluted earnings per share to increase between 10 and 14 per cent this year, rather than 12 to 18 per cent as previously predicted. View image in full screen Railcars and locomotives are shown at the CPKC railyard in Calgary on Aug. 22, 2024. The Calgary-based company has lowered its financial forecast for the coming year amid trade uncertainty, despite a Q1 profit increase. THE CANADIAN PRESS/Jeff McIntosh The downgraded guidance comes despite a 17 per cent increase in net income to $909 million in CPKC's latest quarter versus $774 million in the same period a year earlier. Story continues below advertisement The Calgary-based company says revenues grew eight per cent to $3.80 billion in the three months ended March 31 from $3.52 billion the year before. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Diluted earnings rose to 97 cents per share from 83 cents per share. Canadian Pacific CEO Keith Creel says increasing uncertainty fuelled by shifting tariffs and a risk of recession prompted more moderate earnings expectations for the company.
