Canadian Pacific Kansas City (CP.TO, CP) was last seen down 2% in after-hours New York trading after the company on Wednesday reported an earnings and revenue beat for the first quarter, but provided an updated outlook that suggests it will struggle to meet 2025 earnings expectations due to ongoing tariff and trade policy uncertainty.

CPKC said core adjusted earnings per share, excluding most one-time items, rose 14% to $1.06 from $0.93, a year earlier, beat FactSet consensus forecast of $1.04.

The railway's revenue of C$3,795 million also topped a FactSet forecast of $3,752.1 million.

The company said its operating ratio, an efficiency measure where lower is better, fell by 210 basis points to 65.3% from 67.4% in the prior-year quarter, while it core adjusted operating ration fell 150 basis points to 62.5% from 64.0%.

Freight volumes, measured in revenue ton-miles, rose four percent.

In an updated 2025 outlook, CPKC said as a result of ongoing tariff and trade policy uncertainty, it now expects 2025 core adjusted diluted EPS to rise between 10% and 14% versus 2024 core adjusted diluted EPS of $4.25. This would leave it struggling to meet an existing FactSet forecast for 2025 of $4.84.

"Our talented team of world-class railroaders executed our precision scheduled operating plan to safely and efficiently move solid freight demand to start 2025, producing strong first-quarter results amidst ongoing turbulent market and macroeconomic conditions," said chief executive Keith Creel. "These first-quarter results demonstrate the power and resiliency of our unrivalled North American network."

The railway's shares were last seen down US$1.47 to US$71.00 after hours. They closed up $0.49 to $100.13 on the Toronto Stock Exchange.