Thanks!
EPS of $1.06 beat estimates of $1.03; revenue of $3.79B beat estimates of $3.73B. EBITDA of $1.82B matched estimates. But CP is moving the midpoint of its guidance 2.6% lower -- on account of a stronger Canadian dollar and the impact that tariffs may have on demand -- meaning earnings expectations will need to decrease. Management noted that only about 1% of international freight originates from China and enters Canadian ports destined for the US. The automotive facilities that CP services are returning to normal following the choppiness created by tariff risks. CP expects its adjusted operating ratio to follow typical seasonal patterns and improve by 200-250 bps sequentially in 2Q. This equates to coming in at 60-60.5%, slightly worse than consensus of 59.8%. Management is focused on generating a sub-60 operating ratio this year, which compares with 61.3% in 2024. Please see this question from April 29 on timing. Things could stay choppy but we would be comfortable owning this if an investor can hold throughout the current cycle.