CPKC delivers strong fourth-quarter results; positioned to accelerate growth in 2025

Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC) today announced its fourth-quarter results, including revenues of $3.9 billion, diluted earnings per share (EPS) of $1.28 and core adjusted combined diluted EPS ¹ of $1.29.

 

Fourth-quarter 2024 results

• Revenues increased by three percent to $3.9 billion from $3.8 billion in Q4 2023
• Reported operating ratio (OR) decreased by 210 basis points to 59.7 percent from 61.8 percent in Q4 2023
• Core adjusted combined OR1 decreased by 160 basis points to 57.1 percent from 58.7 percent in Q4 2023
• Reported diluted EPS increased to $1.28 from $1.10 in Q4 2023
• Core adjusted combined diluted EPS1 increased nine percent to $1.29 from $1.18 in Q4 2023
• Federal Railroad Administration (FRA)-reportable personal injury frequency decreased to 0.84 from 1.13 in Q4 2023 ²
• FRA-reportable train accident frequency decreased to 1.03 from 1.08 in Q4 2023

 

“Our team finished our first full year as a combined company strong, with volume growth, improved safety performance, and solid operational execution that allowed CPKC to deliver industry-leading earnings growth in 2024,” said Keith Creel, CPKC President and Chief Executive Officer. “Thanks to our remarkable team of railroaders and their dedication to safety, service and efficiency, we delivered on our commitments to customers and shareholders as we continue to drive sustainable long-term success on this unrivaled North American network.”

 

Full-year 2024 results _³

• Reported operating ratio (OR) decreased by 60 basis points to 64.4 percent from 65.0 percent in 2023
• Core adjusted combined OR1 decreased by 70 basis points to 61.3 percent from 62.0 percent in 2023
• Reported diluted EPS decreased to $3.98 from $4.21 in 2023
• Core adjusted combined diluted EPS1 increased 11 percent to $4.25 from $3.84 in 2023
• FRA-reportable personal injury frequency decreased to 0.95 from 1.15 in 2023 ^{2, 4}
• FRA-reportable train accident frequency increased to 1.01 from 0.99 in 2023 ⁴

 

In 2024, for the second consecutive year, CPKC led the industry with the lowest FRA-reportable train accident frequency among Class 1 railroads, building on Canadian Pacific's legacy of 17 consecutive years of industry leadership.

 

“Looking forward to 2025, we expect another year of strong earnings growth consistent with CPKC’s multi-year guidance provided at our 2023 Investor Day,” Creel added. “We continue to do what we said we would do, staying focused on safety and growth. The opportunities ahead of us are unique as we have the team, the network and the capacity to deliver strong results for all stakeholders.”

 

Full-year 2025 Guidance

• CPKC expects core adjusted diluted EPS1 to increase between 12 and 18 percent versus 2024 core adjusted combined diluted EPS1 of $4.25
• Mid-single digit volume growth, as measured in Revenue Ton Miles
• Capital expenditures of $2.9 billion, with the increase compared to 2024 driven by a higher USD/CAD FX rate
• Other components of net periodic benefit recovery will increase by $76 million from $352 million in 2024

¹ 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 and forward-looking non-GAAP measures, see attached supplementary schedule of Non-GAAP Measures.

 

² The fourth-quarter and full year 2023 FRA-reportable personal injury frequency have been restated to reflect new information available within specified periods stipulated by the FRA but that exceed the Company's financial reporting timeline.

 

³ The results of Kansas City Southern 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.

 

⁴ The full year 2023 comparison for FRA-reportable personally injury frequency and FRA-reportable train accident frequency represent combined operating information to illustrate the estimated effects of the acquisition as if the acquisition closed on January 1, 2022.

 

Conference Call Details
CPKC will discuss its results with the financial community in a conference call beginning at 4:30 p.m. ET (2:30 p.m. MT) on Jan. 29, 2025.

 

Conference Call Access
Canada and U.S.: 800-343-4849
International: 203-518-9848
*Conference ID: CPKCQ424

 

Callers should dial in 10 minutes prior to the call.

 

Webcast
We encourage you to access the webcast and presentation material in the Investors section of CPKC's website at investor.cpkcr.com .

 

A replay of the fourth-quarter conference call will be available by phone through Feb. 5, 2025, at 800-839-3516 (Canada/U.S.) or 402-220-7238 (International).

 

Forward-looking information
This news release contains certain forward-looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities laws in both the U.S. and Canada. Forward-looking information includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking information may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", “guidance”, "should" or similar words suggesting future outcomes. This news release contains forward-looking information relating, but not limited, to statements concerning our ability to deliver on our financial guidance for 2025, strategic initiatives and investments, the success of our business, the realization of anticipated benefits and synergies of the CP-KCS combination, and the opportunities arising therefrom, our operations, priorities and plans, anticipated financial and operational performance, business prospects and demand for our services and growth opportunities.

 

The forward-looking information in this news release is based on current expectations, estimates, projections and assumptions, having regard to CPKC's experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: changes in business strategies, North American and global economic growth and conditions; commodity demand growth; sustainable industrial and agricultural production; commodity prices and interest rates; performance of our assets and equipment; sufficiency of our budgeted capital expenditures in carrying out our business plan; geopolitical conditions, applicable laws, regulations and government policies; the availability and cost of labour, services and infrastructure; labour disruptions; the satisfaction by third parties of their obligations to CPKC; and carbon markets, evolving sustainability strategies, and scientific or technological developments. Although CPKC believes the expectations, estimates, projections and assumptions reflected in the forward-looking information presented herein are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty.

 

Undue reliance should not be placed on forward-looking information as actual results may differ materially from those expressed or implied by forward-looking information. By its nature, CPKC’s forward-looking information involves inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information, including, but not limited to, the following factors: changes in business strategies and strategic opportunities; general Canadian, U.S., Mexican and global social, economic, political, credit and business conditions; risks associated with agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures, including competition from other rail carriers, trucking companies and maritime shippers in Canada, the U.S. and Mexico; North American and global economic growth and conditions; industry capacity; shifts in market demand; changes in commodity prices and commodity demand; uncertainty surrounding timing and volumes of commodities being shipped via CPKC; inflation; geopolitical instability; changes in laws, regulations and government policies, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; disruption in fuel supplies; uncertainties of investigations, proceedings or other types of claims and litigation; compliance with environmental regulations; labour disputes; changes in labour costs and labour difficulties; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; sufficiency of budgeted capital expenditures in carrying out business plans; services and infrastructure; the satisfaction by third parties of their obligations; currency and interest rate fluctuations; exchange rates; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; trade restrictions or other changes to international trade arrangements; the effects of current and future multinational trade agreements on the level of trade among Canada, the U.S. and Mexico; climate change and the market and regulatory responses to climate change; anticipated in-service dates; success of hedging activities; operational performance and reliability; customer, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; the adverse impact of any termination or revocation by the Mexican government of Kansas City Southern de México, S.A. de C.V.’s Concession; public opinion; various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; acts of terrorism, war or other acts of violence or crime or risk of such activities; insurance coverage limitations; material adverse changes in economic and industry conditions, including the availability of short and long-term financing; the demand environment for logistics requirements and energy prices, restrictions imposed by public health authorities or governments, fiscal and monetary policy responses by governments and financial institutions, and disruptions to global supply chains; the realization of anticipated benefits and synergies of the CP-KCS transaction and the timing thereof; the satisfaction of the conditions imposed by the U.S. Surface Transportation Board in its March 15, 2023 final decision; the success of integration plans for KCS; other disruptions arising from the CP-KCS integration; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favourable terms or at all; cost of debt and equity capital; improvement in data collection and measuring systems; industry-driven changes to methodologies; and the ability of the management of CPKC to execute key priorities, including those in connection with the CP-KCS transaction. The foregoing list of factors is not exhaustive. These and other factors are detailed from time to time in reports filed by CPKC with securities regulators in Canada and the United States. Reference should be made to “Item 1A – Risk Factors” and “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements” in CPKC’s annual and interim reports on Form 10-K and 10-Q.

 

Any forward-looking information contained in this news release is made as of the date hereof. Except as required by law, CPKC undertakes no obligation to update publicly or otherwise revise any forward-looking information, or the foregoing assumptions and risks affecting such forward-looking information, whether as a result of new information, future events or otherwise.

 

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.
 

 

Contacts:

 

Media
mediarelations@cpkcr.com

 

Investment Community
Chris de Bruyn
403-319-3591
investor@cpkcr.com

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