(Canadian Pacific issued the following news release on October 25.)
CALGARY — Canadian Pacific Railway reported net income increased 15 per cent to $204 million, or $1.27 per diluted share in the third quarter of 2005, compared with $177 million, or $1.11 per diluted share in the same period of 2004.
SUMMARY OF 3RD QUARTER 2005 COMPARED WITH 3RD QUARTER 2004
Excluding foreign exchange gains on long-term debt and other specified
items:
— Diluted earnings per share grew 29 per cent to $0.84 from $0.65, driven largely by improved yield
— Operating income grew 14 per cent to $249 million
— Operating ratio improved 50 basis points to 77.4 per cent
Rob Ritchie, President and Chief Executive Officer of CPR, said: “CPR’s ability to execute our integrated operating plan was tested under conditions of high demand for service and limitations caused by track work to expand capacity in the west during the quarter. We met service commitments to customers and handled a third-quarter record workload while keeping the expansion on schedule and on budget.
“The combination of good service and tight capacity in a high-demand marketplace continued to generate a positive yield environment. We capitalized on this through CPR’s quality revenue growth strategy, producing a 12 per cent increase in revenue per carload.
“CPR is confident in our full-year projections going into the home stretch of 2005.
Market conditions are solid and demand remains strong,” Mr. Ritchie said. “We also expect to see improved operating efficiency when our western expansion work is complete in the fourth quarter and CPR can take advantage of the new double track, longer sidings and better signal systems.”
Revenue increased to $1,105 million, a third-quarter record, from $990 million in third-quarter 2004. There were double-digit growth rates in four of CPR’s business lines, led by coal at 35 per cent and intermodal at 13 per cent.
Operating expenses before other specified items were $855 million in third-quarter 2005, compared with $771 million in the same period of 2004. The increase was mainly due to higher fuel and compensation and benefits costs. Fuel prices reached record highs, however, CPR recovered almost all of the increase through revenue from its surcharge mechanism, as well as hedging and fuel efficiency measures. A rapid appreciation in CPR’s share price drove up stock-based incentive compensation, a large portion of which is marked to market and accounts for almost half of the increase in compensation and benefits costs.
Canadian Pacific Railway is a transcontinental carrier operating in Canada and the U.S. Its 14,000-mile rail network serves the principal centres of Canada, from Montreal to Vancouver, and the U.S. Northeast and Midwest regions. CPR feeds directly into America’s heartland from the East and West coasts. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico. Canadian Pacific Logistics Solutions provides logistics and supply chain expertise worldwide. For more information, visit CPR’s website at www.cpr.ca.