Canadian Pacific Kansas City (NYSE: CP) said third-quarter 2024 revenues and earnings improved on freight volumes that were slightly higher than the year-ago quarter.
The Calgary, Alberta-based railroad forecast freight volume gains in the mid-single digits and double-digit earnings gains for full-year 2024.
Third-quarter revenues were up 6% to $2.53 billion with diluted earnings per share of 65 cents and core adjusted combined diluted EPS of 72 cents.
“During the third quarter, we delivered strong performance across the operations of our unrivaled North American network, despite dealing with a number of temporary headwinds,” said Keith Creel, CPKC president and chief executive, in an earnings release. “We continue to see strong revenue growth, uniquely enabled by this new network. With our commitment to operational excellence, safety and customer service, we are doing what we said we would do and generating value for all stakeholders.”
Among other negative factors, a breakdown in contract negotiations led CPKC to briefly lock out union employees in late August.
The railroad’s operating ratio, or operating expenses expressed as a percentage of revenues, a key indicator, was 66.1%, an increase of 110 basis points from 64.9% a year ago. Core adjusted combined OR increased by 120 bps to 62.9% from 61.7%.
Diluted EPS increased to 65 cents from 61 cents, while core adjusted combined diluted EPS increased 8% to 72 cents from 66 cents in Q3 2023.
Freight volumes as measured in revenue ton-miles (RTMs) increased 4%.
“I am proud of this team of railroaders for overcoming challenges to still deliver on our guidance; as we look to close 2024 with growing momentum, we’ve never been more excited about the opportunities ahead,” Creel said. “Our strategic initiatives and investments position us well for more growth and success for the remainder of this year, in 2025 and beyond. Fueled by the strength of our dedicated team of railroaders, we are confident in our ability to continue producing results for our customers and long-term value for shareholders.”
The company revised its guidance and now expects full-year 2024 RTMs to increase by mid-single digits versus 2023 on a combined basis. Core adjusted combined diluted EPS is forecast to grow by double digits from $2.77 in 2023.
