Canadian Pacific Kansas City Ltd. has faced a financial setback of $200 million due to the ongoing trade tensions initiated by the United States, as confirmed by CEO Keith Creel. Despite this challenge, Creel expressed optimism even as uncertainties linger around the North American free trade agreement.
During a recent conference call with analysts, Creel highlighted the significant impact of approximately $200 million on the company’s revenue due to the prevailing uncertainty in the trade environment. As the head of the only railway spanning across the three North American countries, Creel emphasized the importance of the upcoming renegotiation of the United States-Mexico-Canada Agreement (USMCA) in potentially balancing trade flows and addressing trade deficit concerns raised by President Donald Trump.
Creel underscored the potential benefits of a positive renewal of the USMCA, emphasizing the critical interdependence of the three nations for mutual success. He expressed hope for the agreement’s renewal by summer, citing the substantial growth in trilateral trade to over US$1.6 trillion since the implementation of the North American Free Trade Agreement in 1994.
Despite the revenue increase of one percent to $3.92 billion in the latest quarter, CPKC reported a 10 percent decline in profits. The company attributed the profit downturn to various factors, including trade tensions and proposed mergers within the rail industry, notably Union Pacific Corp.’s bid to acquire Norfolk Southern Corp.
Creel raised concerns about the potential implications of rail industry consolidation, particularly the proposed UP-NS merger, which could significantly impact competition and market dynamics. He warned of the risks associated with such consolidation, stressing the importance of maintaining a competitive and diverse rail transportation system in North America.
While CPKC reported a three percent increase in core adjusted diluted earnings, the company fell slightly short of analysts’ expectations. Looking ahead to 2026, CPKC anticipates mid-single-digit volume growth and low double-digit earnings per share growth, with plans to reduce capital expenditures by 15 percent to $2.65 billion.
In addition, CPKC announced a quarterly dividend of nearly 23 cents per share on outstanding common shares, payable on April 27. The company’s full-year results showed an 11 percent increase in net income to $4.14 billion and a nearly four percent rise in revenues to $15.08 billion.