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 EMPLOYMENT & NOTICES



Rail News Home Rail Industry Trends

10/27/2009



Rail News: Rail Industry Trends

CP reins in costs, but revenue and traffic take a tumble


advertisement

Like the other Class Is that have reported third-quarter financial results so far, Canadian Pacific weathered the recession because of cost controls and productivity gains.

Net income rose 14 percent to $183 million and diluted earnings per share increased 5 percent to $1.09 compared with third-quarter 2008 figures. However, excluding a foreign exchange gain and loss on long-term debt and other specified after-tax items — including the sale of two properties — adjusted income declined 22 percent to $135 million and adjusted diluted earnings per share fell 29 percent to 80 cents.

Total carloads tumbled 18 percent to 602,400 units and total revenue dropped 20 percent to $1 billion compared with third-quarter 2008 data. Grain revenue rose 7 percent to $262 million, but intermodal revenue dropped 26 percent to $267.5 million, coal revenue declined 25 percent to $112.2 million, industrial and consumer products revenue decreased 23 percent to $179.7 million, sulfur and fertilizers revenue tumbled 36 percent to $75.3 million and automotive revenue fell 29 percent to $55.9 million.

But CP’s operating ratio improved slightly, dropping 0.3 points to 76. And due to ongoing efforts to rein in costs, the Class I’s operating expenses declined 20 percent to $776 million compared with third-quarter 2008 expenses. Although costs tied to compensation and benefits rose 3 percent to $300.9 million, fuel expenses plunged 51 percent to $126 million, purchased services and other costs decreased 7 percent to $142.2 million, and material costs dropped 7 percent to $43 million.

“We are continuing to refine and optimize our business processes to further drive structural cost improvements,” said CP President and Chief Executive Officer Fred Green in a prepared statement. “This increases our flexibility and positions us well to respond to changes in volumes as the economy begins to recover.”


Contact Progressive Railroading editorial staff.

More News from 10/27/2009