(Source: Canadian Pacific Railway press release, January 22, 2015)
CALGARY, Alberta — Canadian Pacific Railway Limited today announced the lowest quarterly operating ratio in the company’s history and record net income for both the fourth quarter and the full year 2014.
Revenues in the fourth quarter climbed 10 percent to an all-time high $1.76 billion. Net income rose to a record $451 million, or $2.63 per diluted share. Adjusted earnings in the fourth-quarter jumped to $460 million, or $2.68 per share, from $338 million, or $1.91 per share, in the fourth quarter 2013.
“I am proud of the team at CP, which continues to build momentum as we exited the year with double-digit revenue growth and a sub-60 operating ratio, proving again our ability to control costs while growing the top line,” said E. Hunter Harrison, CP’s Chief Executive Officer. “In just two short years, CP has transformed from an industry laggard into a railway leader, and achieved its ambitious 2016 targets two full years ahead of schedule.”
FULL-YEAR 2014 HIGHLIGHTS
• Revenue climbed 8 percent to an all-time high $6.62 billion
• Operating ratio fell to a record 64.7 percent, a 520-basis-point drop on an adjusted basis
• Reported EPS rose 71 percent to a record $8.46
• Adjusted EPS climbed 32 percent to $8.50
“CP’s remarkable transformation has allowed it to exceed its operational and financial goals for 2014, positioning the company to be nimble in the near-term and successful in the long run,” Harrison said. “CP fully recognizes the impact of short-term volatility in commodity prices, but given the diversity of its business and proven ability to control costs, we’re confident in our ability to execute on our plan going forward.”
“We are just getting started,” Harrison said.
2015 FULL-YEAR GUIDANCE
• Operating ratio below 62 percent
• Revenue growth of 7-8 percent
• Adjusted EPS increase of more than 25 percent vs. 2014 adjusted EPS of $8.50
KEY ASSUMPTIONS
• No assumption on share buybacks beyond current NCIB program expiring March 16, 2015
• Canadian dollar to U.S. dollar exchange rate of C$1.20
• Tax rate of 27.5 per cent
• Defined benefit pension expense of approximately $45 million vs. 2014 pension income of $43 million
• Capital expenditures of approximately $1.5 billion
• Average On Highway Diesel price of $2.70
• Average WTI price of $46
• 140,000 crude carloads