Canadian Pacific Railway Ltd (CP) CEO Keith Creel on Q2 2022 Results - Earnings Call Transcript

Canadian Pacific Railway Ltd (NYSE:CP) Q2 2022 Earnings Conference Call July 28, 2022 8:30 AM ET

Company Participants

Maeghan Albiston - VP, Capital Markets

Keith Creel - CEO, President & Director

John Brooks - EVP & CMO

Nadeem Velani - EVP & CFO

Conference Call Participants

Thomas Wadewitz - UBS

Fadi Chamoun - BMO Capital Markets

Walter Spracklin - RBC Capital Markets

Kenneth Hoexter - Bank of America Merrill Lynch

Brian Ossenbeck - JPMorgan Chase & Co.

Brandon Oglenski - Barclays Bank

Jonathan Chappell - Evercore ISI

Bascome Majors - Susquehanna Financial Group

Scott Group - Wolfe Research

Jason Seidl - Cowen and Company

Christian Wetherbee - Citigroup

Amit Mehrotra - Deutsche Bank

Operator

Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I'd like to welcome everyone to Canadian Pacific's Second Quarter 2022 Conference Call. The slides accompanying today's call are available at investor.cpr.ca. [Operator Instructions].

I would like to now introduce Maeghan Albiston, Vice President, Capital Markets, to begin the conference.

Maeghan Albiston

Thank you, Stephanie. Good morning, everyone, and thank you for joining us today. Before we begin, I want to remind you that this presentation contains forward-looking information, and actual results may differ materially. The risks, uncertainties and other factors that could influence actual results are described on Slide 2 in the press release and in the MD&A that are filed with Canadian and U.S. regulators. This presentation also contains non-GAAP measures, which are outlined on Slide 3. With me here today is Keith Creel, our President and Chief Executive Officer; Nadeem Velani, Chief Financial Officer; and John Brooks, Chief Marketing Officer. The formal remarks will be followed by Q&A. And in the interest of time, we appreciate if you could limit your questions to one. With that, it's now my pleasure to introduce our President and CEO, Mr. Keith Creel.

Keith Creel

Thanks, Meghan. Good morning, and thank you for everyone joining us today. Let me start off as I always do, thinking our entire CP family. I can tell you it's a very challenging first quarter.

I'm extremely proud of the resilience and the tenacity this team's demonstrated delivering these results over this second quarter of the year. During the quarter, we produced second quarter revenues of $2.2 billion, an operating ratio of 59.7, core EPS of $0.95. As we expected with a more normal operating environment, the team delivered strong sequential improvement in number of the metrics that drove the financial performance. We had the sequential improvement Q1 to Q2 of 16% on locomotive productivity, car miles per day, improved 15%, dwell improved 13%. Also, I'm very excited about the [indiscernible] business initiatives that continue to be accomplished by the marketing team, with some exciting developments on the customer front, new business announcements and even a port expansion, which John will get into more detail in his comments. On the CP-KC front, positive momentum continues toward our transformational merger. Last week is -- many of you are aware of the STB announced dates for the public hearings, going to be late to invert as we continue toward an early 2023 decision date. Customer feedback continues to be overwhelming. We continue to run test shipments -- on an interline basis in intermodal, grain, metals and continue to have very progressive and exciting exploratory discussions about new opportunities in export potash.