CPKC reports progress on hydrogen locomotive program

Published 20/02/2025, 22:22
CPKC reports progress on hydrogen locomotive program

CALGARY, AB - Canadian Pacific Kansas City (TSX: NYSE:CP) (NYSE: CP), known as CPKC, a prominent player in North American ground transportation with a market capitalization of $72.85 billion, today highlighted its sustainability advancements in the 2025 Climate Mileposts report. The report details CPKC’s ongoing efforts to decarbonize its locomotive fleet and improve fuel efficiency as part of its long-term environmental strategy. According to InvestingPro analysis, the company’s stock is currently trading near its Fair Value, with a robust financial health score of "GOOD."

CPKC’s President and CEO Keith Creel emphasized the importance of rail as a fuel-efficient mode of transportation and the company’s commitment to enhancing locomotive operating efficiency. With impressive gross profit margins of 51.86% and revenue growth of 15.86% over the last twelve months, the company continues to demonstrate strong operational performance. He also mentioned the progress of the Hydrogen Locomotive Program, which has logged over 6,000 miles in freight service testing by the end of 2024. For deeper insights into CPKC’s financial metrics and growth potential, investors can access comprehensive analysis through InvestingPro, which offers exclusive ProTips and detailed research reports.

The company has expanded its hydrogen test fleet early in 2025, adding three more locomotives and an additional tender car. Plans are in place to further increase the fleet with four additional locomotives later in the year. CPKC also successfully conducted over 1,100 fueling events as part of a biofuel trial in British Columbia, testing the operational impacts of B20 locomotive biofuel.

Furthermore, CPKC is preparing for the delivery of 100 Tier 4 diesel-electric locomotives within 2025. These locomotives are expected to reduce emissions, enhance fuel economy, and improve reliability.

The report contains forward-looking information, including management’s plans and objectives for future operations, particularly regarding locomotive decarbonization and sustainability actions. It outlines CPKC’s climate strategy for reducing greenhouse gas emissions and its commitment to climate action.

However, CPKC cautions that forward-looking information is subject to risks and uncertainties that could cause actual results to differ materially. Factors such as changes in business strategies, market conditions, commodity prices, competition, shifts in demand, and regulatory changes could impact the company’s operations.

CPKC, headquartered in Calgary, Alberta, Canada, operates the first single-line transnational railway connecting Canada, the United States, and Mexico. Employing approximately 20,000 people, CPKC’s network spans roughly 20,000 route miles, providing access to major ports and facilitating comprehensive rail service across North America. InvestingPro subscribers can access detailed financial analysis, including 8+ additional ProTips and a comprehensive Pro Research Report that provides deep insights into CPKC’s market position and growth prospects.

This report is based on a press release statement from CPKC.

In other recent news, Canadian Pacific Kansas City Limited has secured a $500 million unsecured term loan as part of a broader Credit Agreement with Bank of Montreal and other financial institutions. This loan, with a six-month maturity, includes flexible interest options and specific conditions on additional liens and asset disposals. Additionally, the company has reached a tentative four-year collective agreement with the United Steelworkers, covering approximately 600 clerical and intermodal employees in Canada. This marks the third labor agreement Canadian Pacific has brokered this year in the country.

On the analyst front, Loop Capital Markets has downgraded Canadian Pacific Kansas City’s stock from "Buy" to "Sell," reducing the price target from Cdn$125.00 to Cdn$70.00. The downgrade is attributed to the company’s exposure to potential trade disruptions between the United States and Canada, given its unique cross-border operations. The company’s stock was noted to have been trading at an industry-high price-to-earnings ratio, which could face pressure in light of these trade tensions. Furthermore, Canadian Pacific has announced its annual shareholder meeting for April 30, 2025, with March 10 set as the record date for eligible shareholders. This meeting will include standard annual procedures and possibly special topics, although specifics have not yet been disclosed.

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