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7/28/2023
Canadian Pacific Kansas City yesterday reported second-quarter 2023 revenue of CA$3.2 billion, net income of CA$1.3 billion and diluted earnings per share (EPS) of $1.42.
The quarter is the first to be reported since the merger of Canadian Pacific and Kansas City Southern was approved by the U.S. Surface Transportation Board on April 14. The merger completes the first single-line railroad linking Canada, the United States and Mexico.
The Class I reported that its operating ratio increased by 970 basis points to 70.3% from 60.6% in Q2 2022. The core adjusted operating ratio increased 430 basis points to 64.6% from 60.3% a year ago.
The diluted EPS of $1.42 was an increase from an EPS of 82 cents a year ago due to the net impact of the derecognition of the investment in Kansas City Southern upon the consolidation, CPKC officials said in a press release. The core adjusted combined diluted EPS decreased to 83 cents from 95 cents a year ago.
The Class I’s Federal Railroad Administration-reportable train accident frequency declined 32% to 0.76 from 1.11 in Q2 2022.
"Despite the challenging results, we still expect to deliver mid-single-digit core adjusted combined diluted EPS growth in 2023," said CPKC President and CEO Keith Creel.
Long-term growth opportunities for the newly combined railroad "are unique and undeniable," he said.
"With our CPKC advantage, we are extending our reach for our customers, introducing new service offerings to the marketplace and creating new competition in North American supply chains," Creel added.
Meanwhile, CPKC recently placed an order with Ballard Power Systems for 18 200-kilowatt fuel cell engines as part of an expansion of the railroad’s hydrogen locomotive program.
Over the past two years, Ballard has supplied CPKC with 20 fuel cell engines for use in three different types of locomotives, with combined fuel cell power of 4 megawatts, Ballard officials said in a press release.
The locomotives have been undergoing field testing in 2022 and early 2023 with successful tests, Ballard officials said. The additional fuel cell engines are slated for delivery this year.
"We are thrilled to support our partner, CPKC, as they expand their development of fuel cell-powered locomotives to decarbonize critical transportation routes," said Seungsoo Jung, Ballard’s vice president of rail and emerging markets.