Canadian Pacific CEO downplays trade battle

CALGARY (CP) — Canadian Pacific Railway Ltd. is downplaying the potential negative impact on its operations from a trade war between the United States and China.

China accounts for 12 per cent of North American revenues, with direct business between the world’s two largest economies coming in at less than five per cent, analysts were told during a conference call Thursday about its third-quarter results.

“We’re just a business that’s getting tossed around a bit with this China connection being overemphasized in the marketplace,” said chief executive Keith Creel.

Chief marketing officer John Brooks said trade tensions and the imposition of hefty import tariffs by both sides have prompted international customers to start to pull forward some of their business. The impact is mainly felt from some Vancouver imports and U.S. grain exports from the Midwest.

“But outside of that, we’re pretty resilient in that space. And again, it’s a total percentage, it’s not giant numbers,” Brooks said.

Creel said the Calgary-based company aims to ramp up crude shipments over the next few months to a run rate of about 100,000 carloads a year as it looks to generate higher profits after posting record revenues and adjusted earnings in the third quarter.

CP Rail earned $622 million or $4.35 per diluted share for the quarter ended Sept. 30, compared with $510 million or 3.50 per share for the same period a year earlier.