Canadian Pacific Kansas City (CPKC) announced its higher fourth-quarter profits and revenue, driven by accelerated merger-related synergies. Despite facing challenges, CEO Keith Creel highlighted the railway’s ability to deliver on its guidance of double-digit earnings growth while prioritizing safety. CPKC, as the only rail network connecting Canada, Mexico, and the U.S., is heavily reliant on North American trade.
Looking ahead, CPKC expects revenue ton-miles to grow between 4% and 6% in the coming year, leading to projected earnings growth of 12% to 18%. Creel emphasized the long-term fundamentals of the North American economy and the importance of trade between the three countries. The uncertainty surrounding tariffs and trade negotiations between the U.S., Canada, and Mexico remains a concern, but the interconnected nature of their economies and supply chains underscores the significance of CPKC’s role in facilitating trade growth.
The railway’s Chief Marketing Officer, John Brooks, noted that supply chains have remained relatively stable despite tariff increases, highlighting the complexity and interdependence of these networks. CPKC continues to invest in cross-border capacity to accommodate traffic growth, with recent infrastructure improvements in the U.S. and Mexico enhancing operational efficiency.
CPKC’s commitment to growth is evident through its investments in new locomotives and ongoing upgrades to enhance operational flexibility. The railway’s volume increased in the fourth quarter, driven by various merger-related synergies such as increased grain shipments, record automotive volume, and growth in intermodal services with Mexico.
For the fourth quarter, CPKC reported an 8% increase in operating income, reaching CA$1.5 billion, with revenue growing by 2% to CA$3.87 billion. Adjusted earnings per share saw a 9% increase to CA$1.29. The operating ratio for the quarter improved by 2.1 points to 59.7%.
Looking at the full year, CPKC’s operating income grew by 18% to CA$5.1 billion, with revenue increasing by 16% to CA$14.5 billion. Adjusted earnings per share saw an 11% increase. The full-year operating ratio improved to 64.4%, a 0.6-point improvement over the previous year.
CPKC maintained its industry-leading safety record in 2024, with the lowest train accident rate and a 17% improvement in the personal injury rate. The railway’s focus on safety and efficiency continues to drive its success in the industry.
In conclusion, CPKC’s strong performance in the fourth quarter and full year reflects its strategic investments, commitment to safety, and ability to navigate challenges in the evolving trade landscape. As the railway looks towards continued growth and expansion, its role in facilitating North American trade remains crucial in driving economic prosperity across the region.
