CPKC Reports Third-Quarter Results

Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC) today announced its third-quarter results, including revenues of $3.3 billion, diluted earnings per share (“EPS”) of $0.84 and core adjusted combined diluted EPS^{1, 2} of $0.92.

“We are now more than six months into the CPKC story, and I am pleased with the progress we continue to make in unlocking the value of this unrivalled truly North American network,” said Keith Creel, CPKC President and Chief Executive Officer. “While we encountered challenges this quarter due to a softer macro-economic environment and external labor disruptions, we remain focused on safely delivering for our customers across this powerful franchise.”

Third Quarter 2023 Results¹

• Reported operating ratio (OR) increased by 540 basis points to 64.9 percent from 59.5 percent in Q3 2022
• Core adjusted combined OR² increased 190 basis points to 61.7 percent from 59.8 percent in Q3 2022
• Reported diluted EPS decreased to $0.84 from $0.96 in Q3 2022
• Core adjusted combined diluted EPS² decreased to $0.92 from $1.01 in Q3 2022
• Federal Railroad Administration (FRA)-reportable train accident frequency declined nine percent to 1.30 from 1.43 in Q3 2022 on a combined basis³
• FRA-reportable personal injury frequency declined 35 percent to 0.97 from 1.50 in Q3 2022 on a combined basis³

2023 Guidance Update

CPKC now expects core adjusted combined diluted EPS² to be flat to slightly positive versus 2022 core adjusted combined diluted EPS² of $3.77.

“Economic headwinds and other near-term challenges, including the Port of Vancouver strike, have weighed on volumes more than we anticipated; therefore, we are adjusting our near-term guidance accordingly,” Creel added. “Our enthusiasm for this combination and the long-term value it will produce remains unchanged as we stay focused on executing CPKC’s unique and undeniable growth opportunities.”

1	The results of KCS are included on a consolidated basis from April 14, 2023, the date we acquired control. From December 14, 2021 to April 13, 2023, we recorded our interest in KCS under the equity method of accounting.
2	These measures have no standardized meanings prescribed by accounting principles generally accepted in the United States of America (“GAAP”) and, therefore, may not be comparable to similar measures presented by other companies. For information regarding non-GAAP measures including reconciliations, see attached supplementary schedule of Non-GAAP Measures and Forward-Looking Non-GAAP Measures below.
3	FRA statistics for Q3 2022 reflect Canadian Pacific and Kansas City Southern results on a combined basis. In the third quarter of 2022, CP standalone reported FRA personal injury frequency of 0.86 and FRA reportable train accident frequency of 0.37. FRA reportable personal injury frequency on a combined basis was previously reported as 1.51. This restatement reflects new information available within a specified period as stipulated by the FRA but that exceed CPKC’s financial reporting timeline.

For the complete press release, click here.

About CPKC

With its global headquarters in Calgary, Alta., Canada, CPKC is the first and only single-line transnational railway linking Canada, the United States and México, with unrivaled access to major ports from Vancouver to Atlantic Canada to the Gulf of México to Lázaro Cárdenas, México. Stretching approximately 20,000 route miles and employing 20,000 railroaders, CPKC provides North American customers unparalleled rail service and network reach to key markets across the continent. CPKC is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpkcr.com to learn more about the rail advantages of CPKC.

Source: Canadian Pacific Kansas City Limited