A 44% increase in combined revenue in the third quarter was not enough to offset higher expenses at Canadian Pacific Kansas City.
The railway reported net profit of CA$780 million (US$565 million) in the third quarter of 2023, down 12% year-over-year (y/y) from CA$891 million. Diluted earnings per share in the third quarter was US$0.84, compared with US$0.96 y/y. All figures except earnings per share are in Canadian dollars.
Overall revenue totaled CA$3.3 billion in the third quarter, compared with CA$2.3 billion y/y. The third-quarter 2023 revenue figure represents the financial results of a combined CP and Kansas City Southern against CP’s results alone in the third quarter of 2022. If calculating what a combined CP and KCS financial result would look like for the third quarter of 2022, revenue would be down 4%.
Operating expenses were CA$2.2 billion, compared with nearly CA$1.4 billion.
“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 unrivaled truly North American network,” CPKC (NYSE: CP) President and CEO Keith Creel said in a Thursday release. Creel was referring to the merger between Canadian Pacific and Kansas City Southern last March. “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.”
“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 continued. “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.”
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