CPKC reaches tentative labor deal with union Unifor

CALGARY - Canadian Pacific Kansas City (TSX: NYSE:CP) (NYSE: CP), known as CPKC, announced today that it has reached a tentative four-year collective agreement with the union Unifor, which represents around 1,200 of its Canadian employees. The agreement, if ratified, will affect mechanics, laborers, diesel service attendants, and mechanical support staff at CPKC in Canada. The announcement comes as the transportation giant, currently valued at $75.27 billion, maintains its position as a prominent player in the Ground Transportation industry. According to InvestingPro data, the company has demonstrated strong operational efficiency with impressive gross profit margins of 53.63%.

Keith Creel, CPKC President and CEO, expressed satisfaction with the outcome of the negotiations, highlighting the collaborative efforts between the company and Unifor. "By working collaboratively together with Unifor, we have reached an agreement benefiting our employees and their families while continuing to serve the needs of our customers and keeping the Canadian economy moving forward," Creel stated.

The specifics of the agreement remain undisclosed until the ratification process is complete. The ratification is a necessary step before the new agreement becomes effective and binding. This process involves a vote by the union members to either accept or reject the terms negotiated by their representatives.

CPKC operates as the first and only single-line transnational railway that connects Canada, the United States, and Mexico. The railway boasts about 20,000 route miles and employs approximately 20,000 railroaders. It provides North American customers access to major ports and markets across the continent, offering a range of freight transportation services, logistics solutions, and supply chain expertise. The company's robust operations have driven significant growth, with revenue increasing by 28.53% in the last twelve months. InvestingPro subscribers can access 10+ additional exclusive insights about CPKC's financial health and growth prospects through the comprehensive Pro Research Report.

The tentative agreement is a key development for CPKC, as labor relations have a significant impact on the company's operations and service capabilities. A ratified agreement would ensure continued operations and service to CPKC's customers without interruption from labor disputes. This stability is particularly important as the company approaches its next earnings announcement on January 29, 2025. With a track record of 24 consecutive years of dividend payments and historically low price volatility, CPKC continues to demonstrate operational resilience despite trading at a relatively high P/E ratio of 30.39.

This news is based on a press release statement and does not include any additional information beyond the facts presented by CPKC and Unifor. The ratification details and the future implications of the agreement will become clearer once the union members have had the opportunity to review and vote on the proposed terms.

In other recent news, Canadian Pacific Kansas City Limited (CPKC) has seen significant developments. The company reported a 6% increase in revenue to $3.5 billion and an 8% rise in earnings per share to $0.99 in the third quarter. This comes despite operational hurdles such as a derailment and labor strike. Wolfe Research upgraded CPKC's stock rating to Outperform, following the acquisition of Kansas City Southern (NYSE:KSU). Jefferies reiterated its Buy rating, highlighting the potential for share repurchases in 2025, while RBC Capital reduced its price target but maintained an Outperform rating. Stephens revised its price target for CPKC to $81, maintaining an Equal Weight rating due to uncertainties. These recent developments highlight the company's resilience and potential for growth.

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