CALGARY, ALBERTA, CANADA — Net income at Canadian Pacific (CP) surged 89% in the third quarter ended Sept. 30, climbing to C$891 million, equal to C$0.96 per share on the common stock, from C$472 million, or C$0.71 per share, in the same period a year ago. Total revenues also improved, increasing 19% to C$2.31 billion from C$1.94 billion.
“Throughout the year, we have said 2022 would be a tale of two halves and that is exactly how it is unfolding,” said Keith Creel, president and chief executive officer of CP. “The third quarter saw strong demand in potash and intermodal that we anticipated, and CP was well-resourced to handle the volume increases we have seen. I’m proud of the results the team delivered this quarter and excited about the opportunities in front of us.”
Grain revenues totaled C$391 million in the third quarter, up 11% from C$352 million a year ago. Volume, though, eased 2%.
“We saw this year’s grain harvest really start to begin the last couple of weeks of the quarter, and volumes have quickly now ramped up as we move into Q4,” John K. Brooks, executive vice president and chief marketing officer of CP, said during an Oct. 26 conference call with analysts. “The most recent expectation for the Canadian grain crop size is around 75 million metric tons. This would make it a top five all-time crop and about 7% better than the five-year average. This comes at a great time, certainly following a lot of investment into the supply chain by not only Canadian Pacific, but many of our grain partners.
“This will be the first year we have a critical mass of our new high-capacity grain cars. If you recall, back in 2018, we announced a multiyear plan to purchase 5,900 new high-capacity grain cars, and we’re going to receive the last little bunch of those later this year. So, if you look at that investment, we are seeing on average about a 5% lift in our loaded tons per car. And by the end of this year, I can tell you, we’ll have over 50% of our origin elevators capable to load 8,500 feet. As grain typically makes up about 20% of our book of business, as I look ahead, we are well positioned for strong performance across our grain network on both sides of the border.”