CP earnings rise on 15% volume growth

Canadian Pacific reported Wednesday that third-quarter revenue increased 15% to C$1.3 billion, reflecting gains that included a 23% increase in industrial and consumer products traffic and a 41% increase in sulfur and fertilizers volume.

Reported net income was C$197.3 million and reported diluted earnings per share were C$1.17, both down 6% from third-quarter 2009. Adjusted for third quarter 2009 one-time gains totaling $C79.1 million, mostly from real estate sales, earnings increased 27% from C$160.9 million and adjusted diluted earnings per share increased 27% to C$1.21, beating Wall Street’s anticipated C$1.15. Adjusted operating income increased 28 % from C$263.8 million and the adjusted operating ratio improved 270 basis points to 73.7%.

“CP delivered another strong quarter of financial performance on double-digit revenue growth and an improved operating ratio,” said President and Chief Executive Officer Fred Green. “We are building a solid foundation based on safety, service reliability and operational efficiencies that continue to drive value to our employees, customers and shareholders.”

Commenting on the CP report, Raymond James, transportation analyst, said while the outlook for railroads is “very bright,” there’s a question as to what will happen in 2011 when “the hurdles become a little bit higher” as performance is judged against the improved performance of 2010.