Canadian Pacific Railway Ltd. has had a record second quarter with revenue up 12 per cent and profit up 48 per cent, as it cleared the backlog of Canadian grain.
Net income soared to $371 million or $2.11 a share from $252 million or $1.43 a share in the second quarter of 2013.
“I would highlight this quarter as record after record after record,” said CEO Hunter Harrison in a conference with analysts.
CP and CN Rail have been under pressure to get Canada’s record crop of grains and oilseeds to port and the government eventually mandated a minimum amount of grain to move each week.
Revenue from Canadian grain rose by 32 per cent from last year and U.S grain revenue rose by 26 per cent.
At the same time, it has been handling an 18 per cent increase in oil shipments and a surge in industrial goods sent by rail.
While revenue was up 12 per cent, operating expenses were up only two per cent, the railway reported, leaving it with an "outstanding" 65.1 per cent operating ratio, Harrison said.
The harsh winter and increase loads helped expose some hurdles for the company going forward – among them bottlenecks at railyards in Chicago and Minneapolis-St. Paul.
Harrison took the reins at CP in 2012, instituting a round of layoffs and promising to promote efficiency and reorganize rail routes.
He was upbeat about CP Rail’s performance in today’s press conference. "The future is very promising for the railroad as we transition towards leveraging our lower cost structure and improved service," he said.
CP Rail shares have moved from $121 in September of 2013 to above $201 today in the wake of the good financial performance.
CN Rail reports next week.