By all standard measures, the third quarter was an "outstanding" one for Canadian Pacific, including record earnings and the railroad's lowest-ever operating ratio, CP officials announced this morning.
Adjusted earnings per share jumped 45 percent to an all-time-best $1.88, the operating ratio dropped 8.2 points to a record 65.9, total revenue rose 6 percent to $1.5 billion and net income leaped up 45 percent to $324 million compared with third-quarter 2012 results (all dollar figures are in Canadian dollars).
"The company's focus on service execution while controlling costs is a testament to our team of dedicated, hardworking railroaders," said CP Chief Executive Officer E. Hunter Harrison in a press release. "What we have proven this quarter is the ability to drive earnings growth and lower our operating ratio, even in a softer volume environment."
By commodity group, industrial and consumer products revenue jumped 17 percent to $384 million; fertilizers and sulphur revenue climbed 16 percent to $129 million; coal revenue rose 10 percent to $177 million; grain revenue increased 8 percent to $319 million; and forest products revenue ratcheted up 4 percent to $51 million. Automotive revenue declined 10 percent to $95 million and intermodal revenue dropped 6 percent to $340 million.
Operating expenses decreased 6 percent to $1 billion as compensation and benefit costs fell 11 percent to $331 million, purchased services and other costs declined 4 percent to $216 million and fuel costs dipped 3 percent to $226 million.
"We enter the fourth quarter with momentum and are well positioned for what I believe will be a record 2013," said Harrison. "CP's transformational journey is clearly ahead of plan, yet far from complete; we will continue to make this franchise stronger, creating even more value for customers and shareholders."
CP also announced today that Chief Financial Officer Brian Grassby will retire, but remain part of the senior management team until year-end to help with the transition. A search process is under way and the Class I expects to name a new CFO shortly, CP officials said.
"Brian has played an important role over the past 16 months in CP's turnaround agenda," said Harrison. "On behalf of all our employees and the board, I'd like to thank Brian for his 12 years of dedicated service to the railway and wish him well in his retirement."
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