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RAIL EMPLOYMENT & NOTICES



Rail News Home Financials

10/26/2004



Rail News: Financials

CPR makes strides with third-quarter revenue, income; loses a few steps with expenses, operating ratio


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Fuel costs helped drive up Canadian Pacific Railway's expenses during the third quarter, but the Class I fared much better with revenue and income. Today, CPR reported quarterly freight revenue of $949 million, a 9.6 percent increase compared with third-quarter 2003 data. Quarterly net income rose 93 percent to $176.5 million and operating income increased 7.5 percent to $218.9 million.

"We successfully completed an unprecedented program of track maintenance on our busy western corridor in a compressed time period while moving more freight than ever before," said CPR President and Chief Executive Officer Rob Ritchie in a prepared statement. "With several pinch-points removed, more new locomotives arriving in the coming weeks and 500 new people now qualified to operate trains, CPR has entered the fall-peak season well positioned to handle anticipated freight volumes and to keep our network fluid."

The railroad's quarterly operating ratio worsened 0.4 points to 77.9. Operating expenses rose 10 percent to $770.8 million primarily because of higher fuel prices and freight volume, temporary costs to train additional crews and performance-based incentive compensation expenses.

"[Our] improved fuel surcharge program, which enables CPR to pass on higher prices more quickly, is generating solid results," said Ritchie. "The new surcharge program, in combination with indexing and a favorable hedge position, enabled CPR to recover about three-quarters of our price-related fuel cost increase in the third quarter."

During the year's first nine months, CPR increased freight revenue about 12 percent to $2.8 billion; operating income, about 6 percent to $555 million; and net income, about 25 percent to $283.7 million compared with similar 2003 data. The railroad's operating ratio improved 0.5 points to 80.7. However, operating expenses rose about 6 percent to $2.3 billion compared with last year.

Because of a strong Canadian dollar, CPR's year-to-date revenue and operating income dropped $98 million and $22 million, respectively.


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