Canadian Pacific
Revenues fall 9% in third quarter.
CALGARY, ALBERTA, CANADA — Net income at Canadian Pacific Railway Ltd. in the third quarter ended Sept. 30 totaled $347 million, equal to $2.35 per share on the common stock, up 7% from $323 million, or $2.05 per share, in the same period a year ago. Revenues fell 9% to $1.554 billion from $1.709 billion.


“Despite decreased revenues, tied to a delayed grain harvest and stiff economic headwinds, our business model continues to perform on the cost side,” said E. Hunter Harrison, chief executive officer of CP. “Our commitment to efficiency, asset optimization, and operational excellence has produced yet another record-low operating ratio.”

During the third quarter, CP said Canadian grain freight revenues totaled $222 million, down 15% from the same period a year ago. Canadian grain carloads totaled 65,000 in the third quarter, down 10% from 72,000 in the same period a year ago. Meanwhile, U.S. grain freight revenues increased 1% to $150 million from $148 million, while U.S. grain carloads increased 11% to 49,000 from 44,000.

During an Oct. 19 conference call with analysts, Keith Creel, president and chief operating officer of CP, said he remains bullish about grain versus last year.

“The issue that we have been dealing with the delayed harvest in Alberta I think it is 80% caused by the moisture,” Creel said. “I think it is causing from a quality standpoint more blending, which is done in the prairie, so to speak, so it slows down the process of getting into the railcar. But overall the supply chain is doing well so far.

“It is fully charged now. We are going to have to keep an eye on it, and part of the transparency is exactly that on the grain car that we are producing. We were criticized heavily back in 2013 and 2014 for not doing our part, which in fact is not correct. At CP specifically, we moved more grain in 2013 and 2014 at that point than we ever had. What we have learned, though, is to make sure that we are all on the same sheet of music, this supply chain has to work in concert to grain companies, both at the port elevators that load the grain, offload the railcars and in the field where they load the grain. We have to work 24/7 the same way we work 24/7 to optimize the supply chain.”