Canadian Pacific Kansas City Ltd. has faced a financial setback of $200 million due to the ongoing trade disputes initiated by the United States, according to CEO Keith Creel. Despite this challenge, Creel expressed optimism, acknowledging uncertainties surrounding the North American trade agreement.
During a conference call with analysts, Creel disclosed that the company had endured a revenue impact of around $200 million as a result of the prevailing trade uncertainties. He emphasized the importance of renegotiating the United States-Mexico-Canada Agreement (USMCA) to enhance mutual benefits and address trade imbalances highlighted by U.S. President Donald Trump.
Creel highlighted the significance of maintaining positive trade relationships among the three nations, emphasizing that their interdependence contributes to their collective success. He remained hopeful that the USMCA, which has significantly boosted trilateral trade to over US$1.6 trillion since the inception of the North American Free Trade Agreement in 1994, would be renewed in the upcoming months.
Despite encountering challenges, CPKC managed to increase its revenue by one percent to reach $3.92 billion in the latest quarter. This growth was attributed to enhanced operational efficiency and a slight uptick in freight volumes. Notably, record-high grain revenues were driven by a thriving crop season, although adverse weather conditions at the Port of Vancouver limited further growth.
Although CPKC experienced a revenue rise, its profits declined by 10% in the latest quarter, dropping to $1.08 billion from $1.20 billion year-over-year. Apart from trade uncertainties, the rail industry has also been impacted by Union Pacific Corp.’s proposed acquisition of Norfolk Southern Corp., a move that could reshape the North American rail landscape.
Creel expressed concerns about the potential negative implications of the proposed merger on competition and market dynamics within the rail industry. He emphasized the importance of regulatory scrutiny to prevent monopolistic practices that could hinder the efficiency of the rail transportation system.
Looking ahead, CPKC projected mid-single-digit volume growth and low double-digit core adjusted diluted earnings per share growth for the year 2026. The company also planned to reduce capital expenditures by 15% to $2.65 billion. Additionally, CPKC announced a quarterly dividend of nearly 23 cents per share on outstanding common shares, payable on April 27.
