CP cites bad weather, lower grain volume and labor dispute for Q1 revenue decrease

Canadian Pacific yesterday reported first-quarter 2022 revenue decreased 6% to CA $1.84 billion, while net income fell nearly 2% to CA$590 million compared with the same period in 2021.

The Class I posted diluted earnings per share (EPS) of 63 cents for the quarter, down from 90 cents a year ago. The core adjusted diluted EPS, excluding significant items and Kansas City Southern acquisition accounting, was 67 cents.

CP's operating ratio (OR) for the quarter rose to 70.9% from 60.2%. The adjusted OR was 69.8%.

CP officials acknowledged in a press release and a conference call with analysts that Q1 2022 was a tough quarter. They cited harsh winter weather, a work stoppage in late March and lower Canadian grain volumes as factors in the railroad’s financial performance.

"CP continues to see a strong, supportive macroeconomic environment and is focused on providing customers with creative service offerings," said President and CEO Keith Creel. "With a difficult quarter behind us, we are building momentum, which I fully expect will continue to carry through the remainder of 2022."

Demand for North American goods and commodities continues to grow, which highlights “the need for new single-line routes and outlets to reach global markets,” Creel said.

CP continues to work toward its merger with KCS — which is now beneficially owned by CP through a voting trust — pending approval by the Surface Transportation Board.

"Our excitement about the opportunities ahead with the combined companies continues to grow," said Creel.