Canadian Pacific Railway Reports Increase in Profits, Record Operating Revenue for First Quarter 2016

Researched by Industrial Info Resources (Sugar Land, Texas)--Despite a weaker economy, railroad operator Canadian Pacific Railway Limited (NYSE:CP) (Calgary, Canada) reported an increased net income of 69% for the first quarter of this year, up to C$540 million ($427 million) compared with C$320 million ($253 million) from the same quarter of last year. The company also reported a record-low operating ratio of 58.9%. Industrial Info is tracking nine Canadian Pacific projects worth $355.5 million.

Total revenues for this quarter were C$1.59 billion ($1.26 billion), down 4% from first quarter 2015. Freight revenue decreased 5% to C$1.5 billion ($1.2 billion). Total carloads decreased by 4% to 614,000. Total freight revenue per carload fell 1%.

The firm announced plans to spend C$1.2 billion ($948 million) on capital expenditures for this year, compared with C1.5 billion ($1.2 billion) spent in 2015. The amount of money the company saved due to its failure to acquire Norfolk Southern Corporation (NYSE:NSC) (Norfolk, Virginia) allowed it to increase its dividend to shareholders and buy back shares. Chief Executive Officer Hunter Harrison said he still believes that a merger is needed, but realized it won't happen before his retirement next year.

"I still am of the belief that in the future someday it's going to take place or its going to happen," he said in a quarterly earnings conference call on Wednesday. "I would predict post-Harrison [a merger is] going to happen...and it will work very well," he continued. For more information on the unsuccessful $27 billion proposal for the Virginia-based freight railroad owner, see Industrial Info's April 12, 2016, article Spurned Attraction: Canadian Pacific Railway Concedes Defeat in Attempted Takeover of Norfolk Southern.

One of the Canadian Pacific's largest projects that Industrial Info is tracking is the $54 million freight rail state-wide network upgrade/rehabilitation program in Minneapolis, Minnesota. This project involves performing modification and rehabilitation across a 1,725 mile state-wide freight system of track in order to improve safety throughout the network.

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