Canadian Pacific Kansas City Ltd. revealed a $200 million financial setback caused by the persistent trade tensions initiated by the United States, as stated by CEO Keith Creel. Despite this, Creel conveyed optimism amid uncertainties surrounding the North American trade agreement.
During a conference call with analysts, Creel mentioned that the company had incurred around $200 million in revenue losses due to the prevailing uncertainty in the market. He emphasized the importance of renegotiating the United States-Mexico-Canada Agreement (USMCA) to benefit all parties involved and address trade imbalances highlighted by President Donald Trump.
Creel expressed hope for a positive renewal of the USMCA, emphasizing the significance of trilateral trade among the three nations. He anticipated the agreement’s potential renewal before the midterms, underscoring the mutual dependence of the countries for economic success.
Despite facing challenges, including the trade tensions and potential disruptions in the rail industry, CPKC managed to increase its revenue by one percent to $3.92 billion in the latest quarter. The company attributed this growth to enhanced operational efficiency and a slight rise in freight volumes. However, profits dipped by 10% to $1.08 billion in the quarter ended Dec. 31 compared to the same period the previous year.
Union Pacific Corp.’s proposed acquisition of Norfolk Southern Corp. in an $85 billion deal raised concerns about market competition and customer costs within the rail industry. Creel warned about the risks associated with such consolidation, emphasizing the potential impact on rail transportation across North America.
CPKC reported a three percent increase in core adjusted diluted earnings to $1.33 per share, slightly below analysts’ projections. The company forecasted volume growth and earnings per share growth for the upcoming year, alongside a reduction in capital expenditures by 15% to $2.65 billion.
Furthermore, CPKC announced a quarterly dividend of nearly 23 cents per share on outstanding common shares, payable on April 27, indicating a continued commitment to shareholder value.