Media Kit » Try RailPrime™ Today! »
Progressive Railroading
Newsletter Sign Up
Stay updated on news, articles and information for the rail industry

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

View Current Digital Issue »


Rail News Home Canadian Pacific


Rail News: Canadian Pacific

CP drives up revenue and income, drives down operating ratio


The words “solid” and “strong” were bandied about by Canadian Pacific senior officers yesterday to describe the Class I’s fourth quarter and full-year financial results. During an earnings webcast and teleconference, they provided reasons for those characterizations, including double-digit revenue growth.

Despite severe weather during the fourth quarter — some of which caused track washouts in southern Alberta — total revenue rose 13 percent to $1.3 billion, adjusted operating income jumped 34 percent to $299 million, adjusted diluted earnings per share climbed 51 percent to $1.12, volume increased 9 percent to 673,500 units and the operating ratio improved 3.6 points to 77 compared with fourth-quarter 2009 results.

CP drove down its operating ratio because the organization remained focused on three priorities — “safety, asset velocity and productivity,” said President and Chief Executive Officer Fred Green.

“We are ramping up resources and making long-term investments in our company to meet growing demand, further improve customer service and achieve our three- to five-year target of a lows 70s operating ratio,” he said.

Quarterly adjusted grain revenue rose 13 percent as volume inched up 4 percent, sulphur/fertilizers revenue soared 58 percent as volume ballooned 50 percent, merchandise revenue climbed 19 percent as volume increased 9 percent and intermodal revenue rose 11 percent as volume went up 10 percent. Revenue ton-miles (RTM) climbed 14 percent year over year to 32.9 million — the sixth-straight quarter of sequential RTM growth, said Chief Marketing Officer Jane O’Hagan.

Meanwhile, adjusted operating expenses rose 10 percent to $1 billion compared with fourth-quarter 2009 costs. Compensation/benefit costs increased 14 percent and fuel costs ballooned 28 percent as the average diesel price per gallon rose from fourth-quarter 2009’s $2.28 to $2.68, said Chief Financial Officer Kathryn McQuade.

For the full year, CP reported total revenue of $5 billion, up 13 percent; adjusted operating income of $1.1 billion, up 39 percent; adjusted diluted earnings per share of $3.88, up 54 percent; and adjusted operating expenses of $3.9 billion, up 12 percent compared with 2009. The Class I’s operating ratio improved 4.1 points to 77.6.

“We’re pleased with CP’s progress, but there’s more to do,” said Green, adding that the Class I continues to expect modest economic recovery.

During the conference, McQuade also reviewed CP’s proposed 2011 capital spending budget, which is expected to range between $950 million and $1.05 billion. The railroad is budgeting $680 million for basic track infrastructure renewal; $200 million for productivity and network enhancements; $80 million for information technology needs; and $40 million for regulator work, including positive train control.

Jeff Stagl

Contact Progressive Railroading editorial staff.

More News from 1/27/2011