Canadian Pacific Earnings Fall, 2023 Outlook Revised
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Railway operator Canadian Pacific Kansas City Ltd. unveiled a more muted full-year outlook, saying a weakening economy and spate of labor disruptions weighed on freight volumes in the third quarter more than management had anticipated.
CPKC revised its 2023 outlook to say that earnings per share will be “flat to slightly positive” compared with last year on an adjusted basis. Previously, it said it would have mid-single-digit growth this year.
CEO Keith Creel called it a “challenging quarter” with softening consumer demand and supply chain snarls resulting from a dockworkers’ strike in British Columbia.
“Certainly not the outcome we had planned, but it’s the prudent thing to do at this point,” Creel told analysts. “That said, it’s not the challenges that define us but rather how we respond.”
Earnings fell to 92 Canadian cents a share on a combined adjusted basis, a 9% decline from a year earlier. Revenue grew 44% to C$3.3 billion because of the acquisition of Kansas City Southern, which received regulatory approval earlier this year.
“We’re a little over six months in this combination into our forever story,” Creel said on a conference call with analysts. The growth opportunities “remain unchanged. We’re successfully integrating this network.”
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