CALGARY — Canadian Pacific Railway reported a 43 per cent drop in third-quarter earnings to $65 million but said a gain in operating revenue showed progress, the Canadian Press reported.
Canada’s second-largest railway attributed the earnings drop to a $47 million foreign exchange loss, as the value of the loonie slumped in the three months ended Sept. 30.
Various one-time items, which boosted last year’s third-quarter results, also hurt the year to year comparison.
Excluding these events, CP Rail said net income in the just-ended third quarter increased 10 per cent over last year.
The railway, which became an independent company when parent CP Ltd. broke into five separate firms last year, said revenue rose $19 million or 2 per cent in the quarter.
Operating ratio — a key measure of profitability in the railway industry — rose to 75.6 per cent compared with 75.3 per cent in the same quarter of 2001 but down from 77.9 per cent in the April to June quarter.
CPR president Rob Ritchie said the company had unlocked value in its first year of independence despite challenges.
“We were tested by events beyond our control, including the 9/11 terrorist attacks on the U.S., economic uncertainty, and a severe drought on the Canadian Prairies,” Ritchie said in a release.
“But we overcame these challenges and demonstrated that CPR can perform well in adverse circumstances.”
Net income of $65 million, or 41 cents per share, compared with $113 million, or 72 cents per share, in the third quarter of 2001.
Revenue from grain shipments for the Calgary-based railway declined $19 million, or 10 per cent, largely due to the drought.
Coal revenues were down $12 million, or 10 per cent, reflecting weaker sales of metallurgical coal, partly offset by higher thermal coal volumes in the United States.
“We met these revenue challenges and generated growth during the quarter in other areas of the business to more than offset the declines in grain and coal,” Ritchie said.
Sulphur and fertilizers revenue was up $14 million or 18 per cent, driven by higher potash volumes and favourable timing for fertilizer shipments.