A CPKC locomotive on a train at the Canadian Pacific and Kansas City train yard in Mexico City in September, 2025.Adrian Wyld/The Canadian Press
Canadian Pacific Kansas City Ltd.’s CP-T coal segment weighed on its first-quarter results even as the company benefited from record grain volumes.
“We definitely weren’t counting on the drag related to the coal side of the business. Now looking ahead, just about everything outside of our coal business has inflected positive,” said John Brooks, executive vice-president and chief marketing officer at CPKC.
Freight revenues for the company’s coal segment fell 12 per cent compared to the previous year, coming in at $226-million. The Calgary-based company expects coal to continue to be a headwind going forward.
CPKC reported net income of $845-million during the first quarter, down from $909-million during the same period last year. That amounted to diluted earnings per share of 94 cents during the three months ended March 31, down from 97 cents during the prior-year quarter.
CPKC says its revenue was $3.7-billion during the quarter, down year-over-year from $3.8-billion.
Freight revenues from CPKC’s grain segment rose by 11 per cent, reaching $871-million.
“We delivered solid volume growth across the network, led by record grain and continued momentum from our unique North American footprint. The exceptional grain volumes were supported by record harvest and our ability to efficiently connect Canada to the United States and Mexico,” Keith Creel, the CEO of CPKC, said on the company’s earnings call.
Meanwhile, Brooks said the company sees limited opportunities amid the war in Iran.
“We are definitely seeing an uptick in our plastics business. We have, I would say, very spot-related type of crude opportunities that we’ve seen come on and maybe some unique fertilizer opportunities here and there. Nothing I would consider honestly super needle-moving,” he said.
“The needle movers that are emerging are really tied to fuel price and tied to trucker regulation and reduced capacity, and those things. That’s really where we’re starting to see the needle move.”
In comparison, railway peer Canadian National Railway Co. said in its earnings call on Wednesday that the company is seeing some near-term benefits across various segments related to the higher prices as demand for energy and potash rises.
Janet Drysdale, CN’s chief commercial officer, said liquefied natural gas shipments have ramped up at the port in Prince Rupert, B.C., as global supply shrinks. Volumes for crude oil and refined products rose as well.
Separately, CPKC’s chief executive said he was optimistic that the North American free trade pact between Canada, Mexico and the United States would be renewed this summer, but said there could be near-term disruption.
“At the end of the day, the bottom line is I think we have three nations that depend upon each other to trade. I think that we’re in a unique position to enable that trade,” Creel said.
“Short term, I would say buckle up.”
The company’s operating ratio, its operating expenses as a percentage of revenues, worsened to 66 per cent compared with 65.3 per cent during the same period last year.
On Tuesday, CPKC announced a dividend increase of 17.5 per cent to 26.8 cents per share payable on July 27.