Canadian Pacific Railway Limited (NYSE:CP) Q1 2024 Earnings Call Transcript

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Unidentified Analyst : Great. Thanks for going back to us. Maybe taking a step back, I want to talk about the longer term guidance and particularly kind of conversion of the $5 billion pipeline you guys have outlined. At the Investor Day, it definitely felt very idiosyncratic, still does, but it does feel like the macro maybe disguising some of the success you guys are having around converting that pipeline. So maybe you can just remind us and parse out kind of the long-term guidance, how much you feel is idiosyncratic versus maybe meeting the macro backdrop to be more supportive in terms of unlocking the full potential of that pipeline?

John Brooks: Maybe just a couple of comments on there. In terms of what we laid out in Investor Day, I would say we’re ahead of plan in terms of my expectations on delivering on — frankly, all those categories. Certainly, some may be a little quicker than others. As a primary example is just talking about Lazaro. I do see that being maybe a little bit more back half of this year and 2025 story in terms of cross-border opportunities. But that being said, I would say the area of automotive has really maybe presented itself as more of a pull-ahead opportunity for this network in the development of that closed-loop model that Keith spoke about and the benefits that the franchise provides the OEMs in that area. . I would say we were pretty adamant and clear around finishing 2023 at a $350 million revenue run rate.

I remain very confident in that. We’ll double that exiting 2024. And frankly, that will put us right in line or maybe even a little ahead of what we laid out at Investor Day with those areas. I think your call out around the macro, not being very supportive particularly maybe if you think about some of the intermodal and truck conducive type products is right. We’re trying not to worry about that. Control what we can control, create the product. And if we get a macro tailwind, it’s just going to provide more upside to the story.

Operator: We have reached our allotted time for Q&A. I would now like to turn the call back over to Mr. Keith Creel.

Keith Creel: Thank you. Listen, thank you for joining us again today and give us a chance to just give you an update. And I hope what you take away from this is, this company is in a strong position. We’re in a strong position to achieve the guidance that we laid out in our multiyear plan. We’re in a strong position to achieve the guidance that we’ve laid out for this year. We’ve got to get through this potential work outage that’s ahead of us. We’ve got to see what the macro does, but I can tell you, this is a very unique story. It’s a unique network that’s been created that’s unparalleled in this industry. We’re 1 year old on a journey of our forever story, creating the most relevant rail network in North America. . I couldn’t be more proud to work here and serve with these fine men and women that make this happen day in and day out, and we’ll continue to work hard to meet and exceed our investors’ expectations, our employees, commitments we made to them as well as our customers’ commitments.

I think that’s a recipe for success, and I’m confident this team will achieve that, if not exceed that. Have a great day, and we’ll talk to everyone soon.

Operator: This concludes today’s conference call. You may now disconnect.

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