Canadian Pacific reports record quarterly results, maintains positive outlook

RELATED TOPICS: CANADIAN PACIFIC | FINANCIALS | CANADA
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CPLOGO
CALGARY, Alberta — Canadian Pacific reported record quarterly earnings and revenue today as the railway carried record volumes and led the industry in traffic growth.

CP’s operating income jumped 31%, to $822 million, as revenue surged 13%, to nearly $2 billion. CP reported earnings per share, adjusted for one-time items, of $4.36, a 36% increase that topped analyst estimates.

CP’s 58.4% operating ratio was a second quarter record and a 5.8-point improvement over last year’s second quarter, which included a pair of brief strike-related shutdowns.

“This quarter we saw revenue growth across every line of business, strong operating metrics, and our best-ever second-quarter performance from a workload perspective, as measured by gross ton-miles,” CEO Keith Creel says.

Volume was up 6% whether measured by carloads or revenue ton-miles, the favorite metric of the Canadian railroads.

Despite signs of a slowing economy, executives said they are confident that CP will meet its targets for the year, including mid-single digit volume growth and double-digit growth in adjusted earnings per share.

In the second quarter, the only business segment to show declining carload volume was the metals, minerals, and consumer products category, which was down 3% largely due to dwindling frac sand shipments.

In bulk business, CP reported record potash volume, while it set records for Canadian grain shipments in April and May.

“It was an extremely strong quarter for the bulk portfolio,” Chief Marketing Officer John Brooks says.

Merchandise traffic was boosted by strong automotive, LPG, plastics, and refined products volumes.

Intermodal notched double-digit gains in revenue ton-miles in both the international and domestic segments.

CP’s key operating metrics improved for the quarter, as terminal dwell declined 4% and average train speed climbed 5%. Train weight and train length also rose by 3%.

The railroad’s safety figures also improved, with the personal injury rate declining 30% to a record low and the train accident rate falling by 25%.

NEWSWIRETrains News Wire

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