CP Rail earns record profits despite declining freight volumes
Shipments of crude down by 31%, metal and minerals by 22%
Canadian Pacific Railway Ltd. was able to raise its freight revenue and achieve record profits in the third quarter, despite a drop in movement of key products such as crude oil, metal and minerals and automotive products.
Revenue rose to $1.71 billion or two per cent, but crude shipments were down by 31 per cent, metal and minerals by 22 per cent and automotive by seven per cent.
Nonetheless CP had record third quarter profit, up 16 per cent from a year ago to $2.69 a share.
Net income was $323 million, with foreign exchange costs cutting into the result, but adjusted profit came in at $427 million.
CEO Hunter Harrison said the rail company is feeling the impact of the lowest commodity prices in years, which have depressed shipment volumes.
Nonetheless, tight cost control raised profits. Fuel costs that declined by six per cent helped the railway meet revenue targets.
The sale of the D&H South line helped boost after-tax earnings by $42 million.
"It's clear that despite the ongoing tough economic environment, our continued focus on service, cost control and incremental investment in the franchise will serve customers and shareholders well in the long run," Harrison said.