CP: Solid 4Q, 2013 financial results reflect ongoing turnaround

Canadian Pacific today released fourth-quarter and full-year results for 2013 that "clearly demonstrate the significant progress" the Class I has made in its corporate and operational turnaround efforts, CP officials said in a press release.

In the fourth quarter, total revenue rose 7 percent to a quarterly record $1.6 billion; adjusted operating income climbed 45 percent to $547 million; adjusted net income jumped 49 percent to $338 million; adjusted operating expenses fell 6 percent to $1.1 billion; volume ratcheted up 1 percent to 686,000 units; and the operating ratio dropped a whopping 8.9 points to an all-time record 65.9 compared with fourth-quarter 2012 results (all figures are in Canadian dollars).

"Once again, Canadian Pacific and its outstanding team of railroaders delivered solid results this quarter, closing a historic year with record-setting operational and financial performance," said CP Chief Executive Officer E. Hunter Harrison.

By commodity group on a non-adjusted basis, industrial and consumer products revenue soared 23 percent to $413 million; grain revenue climbed 8 percent to $385 million; forest products revenue rose 7 percent to $49 million; automotive revenue increased 6 percent to $105 million; and coal revenue was flat at $157 million. Fertilizers and sulphur revenue fell 5 percent to $126 million and intermodal revenue dipped 1 percent to $335 million.

For the full year, CP reported record total revenue of $6.1 billion, up 8 percent, and adjusted operating income of $1.8 billion, up 41 percent compared with 2012 totals. Adjusted net income jumped 48 percent to $1.1 billion, adjusted operating expenses declined 2 percent to $4.3 billion and the railroad's operating ratio improved 7.1 points to a record 69.9.

"The transformational pace of change at CP has definitely exceeded expectations," said Harrison. "We entered 2013 with an aggressive agenda of change and financial targets that would put us squarely in the path of achieving our goal of once again becoming an industry leader. I am proud to report that we exceeded those targets, and have reestablished a sense of pride and accomplishment to this historic organization."

However, the journey is "far from complete," and the company expects to maintain its positive momentum by registering solid financial results and shareholder returns in 2014, he said. Full-year guidance released by CP projects revenue growth of 6 percent to 7 percent and a diluted earnings per share increase of 30 percent or greater versus 2013. In addition, the 2014 operating ratio is expected to fall to 65 points or lower.