CALGARY, ALBERTA, CANADA — Described by the company’s chief executive officer as “a record by almost every measure,” the third quarter was a strong one for Canadian Pacific Railway Ltd.
Net income in the quarter ended Sept. 30 totaled C$622 million, equal to C$4.36 per share on the common stock, up 22% from C$510 million, or C$3.50 per share, in the same period a year ago. Revenues, meanwhile, increased 19% to C$1.898 billion from C$1.595 billion.
“These are very impressive results,” Keith E. Creel, president and chief executive officer, said during an Oct. 18 conference call with analysts. “I’m very pleased with the results for the quarter, setting records across the board for the company. Revenues (were) up 19% to $1.9 billion; the operating ratio, obviously, 58.3%. That’s an all-time record for CP, certainly something we’re very proud of. Operating income improved 27% to $790 million; and adjusted EPS, up 42% year-over-year to $4.12.
“Operationally, from a leverage standpoint, productivity standpoint, we continue to see train lengths improved to hit record levels. Fuel efficiency improved by another 3% to hit a record of 0.916 gallons per 1,000 GTMs, which not only is a CP record but as well as an industry best.”
CP said it generated C$384 million in revenues from grain shipments in the third quarter, up from C$351 million in the same period a year ago. For the nine months ended Sept. 30 revenues from grain shipments totaled $1.113 billion, up from $1.107 billion in the same period a year ago.
John K. Brooks, chief marketing officer and senior vice-president, said grain results were led by strong performance out of Canada. September was an all-time record month for shipments to Vancouver, he said, and CP expects the fourth quarter to also remain strong as harvest enters full swing and some weather challenges dissipate.
Commenting on the regulatory environment in Canada, Creel said CP remains respectful and mindful of the issues at hand but does not view them as being problematic.
“As long as we continue to move grain to the marketplace and we’re doing our job — and I think the team is doing a pretty good job as well from what I’m hearing — to move the ag product to export for the country, overall service level’s pretty solid, especially at CP, I think we’re going to be in pretty good space,” he said. “And again, there are some things in that regulation that I didn’t like, but there are some things that I did. There are some things that I love. I love the fact that we’re going to be able to equip all locomotives with cameras to create a safer workplace for our employees as well as the communities we operate in. And I love the fact that we’ve got the economics now to invest in what will become a world-class, best-in-class in Canada grain fleet to enjoy that 8,500-foot train program that we’re rolling out across the industry, trying to maintain and continue to be pacesetters and leaders in the grain ag space.”