CP reports record third quarter net income

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CP - Steve Glischinski
Steve Glischinski
CALGARY, Alberta – Canadian Pacific reports record third quarter 2014 financial results today. Net income in the third quarter rose to a record C$400 million, or C$2.31 per diluted share, from C$324 million, or C$1.84 per share, in the third quarter of 2013. This represents an increase of 26 percent in earnings per share year-over-year.

At the beginning, callers were asked to limit their questions to specific issues around third quarter revenue and expense performance, sending a message that any questions about the recent speculation regarding a proposed merger between CP and CSX Transportation would not be addressed.

The key point made during the call was that third quarter results were gratifying. Additional issues that were given attention included the re-negotiation of two legacy coal contracts that were re-priced to earn the cost of capital. Prior to the re-pricing, “we were paying for the privilege of hauling coal to these customers,” noted CP executives. Also, when asked about the 14 percent drop in revenue from automotive shipments in the third quarter of 2014 compared to the same period in 2013, one executive said that these numbers reflect the loss of a Chrysler contract. Continued concern was expressed about the Chicago rail bottleneck with CP executives saying, “it’s not getting any better.”

While overall results for the quarter were strong, some commodity groups, particularly crude oil, did well in in the quarter compared to the prior year, while others saw weaker performance. Revenue for Canadian grain was up 16 percent, U.S. grain was up 14 percent, coal was down 16 percent, potash was up 4 percent, fertilizers and sulphur were down 14 percent, forest products were flat, chemicals and plastics were up 10 percent, crude oil was up 68 percent, metals and minerals were up 12 percent, automotive was down 14 percent, domestic intermodal was up 18 percent, and international intermodal was down 9 percent.

Compared to the same period in the previous year, revenue rose 9 percent to a record C$1.670 billion, operating expenses rose 4 percent to C$1.049 billion, the operating ratio fell to a record low 62.8, and operating income rose 19 percent to C$621 million, the highest ever for the railroad.

NEWSWIRETrains News Wire

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