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CP NYSE· Canadian Pacific Kansas City Ltd
Earnings report Q3 2023

CP Reports Strong Revenue Growth in Q3 2023

Segments of revenue

In the third quarter of 2023, Canadian Pacific Railway (CP) reported total revenues of $3.34 billion, representing a significant increase of 44% compared to the same period in 2022. This growth was primarily driven by the impact of the KCS acquisition, increased freight revenue per RTM, and higher volumes of Grain. However, it was partially offset by lower volumes of Potash, Intermodal, crude, and frac sand.

Strengths

CP's strong revenue growth in Q3 2023 can be attributed to several factors. Firstly, the acquisition of Kansas City Southern (KCS) had a positive impact on the company's revenue. Additionally, CP benefited from increased freight rates and higher volumes of Grain, logs, poles, and paperboard from Chicago to Alberta. The management's strategic decision to pursue the KCS acquisition has proven to be beneficial for CP's financial performance.

Challenges

Despite the overall positive performance, CP faced challenges in certain segments. The company experienced lower volumes of Potash, Intermodal, crude, and frac sand, which negatively impacted its revenue. These challenges may require CP to reassess its strategies in these segments to drive growth and improve performance.

Noteworthy

It is worth mentioning that CP's revenue growth in Q3 2023 was primarily driven by the impact of the KCS acquisition. This strategic move has expanded CP's market presence and allowed the company to capitalize on increased freight revenue per RTM and higher volumes of Grain. Additionally, CP's revenue growth was also supported by higher freight rates and volumes in Forest products.

Summary

Canadian Pacific Railway (CP) reported strong revenue growth in the third quarter of 2023, with total revenues increasing by 44% compared to the same period in 2022. This growth was primarily driven by the impact of the KCS acquisition, increased freight revenue per RTM, and higher volumes of Grain. However, CP faced challenges in segments such as Potash, Intermodal, crude, and frac sand, which impacted its revenue. Overall, CP's strategic decision to acquire KCS has proven to be a strength, driving revenue growth and expanding the company's market presence.

Source documents

Form 10-Q  filed on Oct 25, 2023
24 pages scanned

Reference data

Company financials Q3 revenue 3.78B
Analyst estimates Q3 EPS beat by 5.85%
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