(Source: Canadian Pacific Railway press release, January 18, 2018)
CALGARY, Alberta — Canadian Pacific Railway Limited today announced its best ever fourth-quarter, with revenues up 5 percent to $1.71 billion and an operating ratio of 56.1 percent.
Fourth-quarter diluted earnings per share (“EPS”) increased 159 percent to $6.77 from $2.61, which includes an income tax recovery of $527 million, primarily as a result of U.S. tax reform net of Canadian provincial tax rate increases. Adjusted diluted EPS rose 6 percent to a new quarterly record of $3.22 from $3.04.
FOURTH-QUARTER 2017 RESULTS
• Revenues up 5 percent to $1.71 billion from $1.64 billion
• Operating ratio improved by 10 basis points to 56.1 percent
• Adjusted diluted EPS rose 6 percent to $3.22 from $3.04
“The fourth quarter was a record by almost every measure and should be celebrated by the men and women in the CP family who work hard every day to deliver for our customers and shareholders,” said Keith Creel, CP President and CEO. “2017 was a positive year where we continued to build the foundation for sustainable long-term growth by enhancing our service offering, strengthening our team of professional railroaders, and furthering strategic partnerships with customers.”
A disciplined growth strategy combined with the fundamentals of precision railroading also produced full-year diluted EPS of $16.44, up 55 percent from $10.63 and full-year adjusted diluted EPS of $11.39, an increase of 11 percent from $10.29. The full-year reported operating ratio was 57.4 percent and adjusted operating ratio was a record 58.2 percent.
FULL-YEAR 2017 RESULTS
• Revenues increased 5 percent to $6.55 billion from $6.23 billion
• Adjusted operating ratio improved by 40 basis-points to a record 58.2 percent from 58.6 percent
• Adjusted diluted EPS rose 11 percent to $11.39 from $10.29
CP’s personal injury rate improved 1 percent and its FRA accident frequency improved 12 percent, making 2017 the 12th consecutive year CP has led the industry with the lowest FRA-reportable train accident frequency.
“Over the course of 2017 we built momentum thanks to our strategic approach to growth combined with our continued focus on operational excellence,” Creel said. “That momentum has us well positioned to start 2018 and we look forward to delivering another year of record results in a safe and disciplined manner.”
2018 FULL-YEAR GUIDANCE
“With a 2018 plan that balances strategic growth with continued productivity improvement, CP expects revenue growth in the mid-single digits and adjusted diluted EPS growth to be in the low double-digits,” said Creel. “I have never been more excited about the potential for CP as we write the next chapter in our compelling story, one focused on sustainable, profitable growth.”
CP’s expectations for adjusted diluted EPS growth in 2018 are based on adjusted diluted EPS of $11.39 in 2017. CP assumes the Canadian-to-U.S. dollar exchange rate will be in the range of 1.25 to 1.30 and expects an effective tax rate of 24.5 to 25 percent. As CP continues to invest in service, productivity and safety, the company plans to invest between $1.35 billion to $1.5 billion in capital programs in 2018.
CP will discuss its results with the financial community in a conference call beginning at 4:30 p.m. eastern time (2:30 p.m. mountain time) on January 18th, 2018.