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Researched by Industrial Info Resources (Sugar Land, Texas)--Canadian Pacific Railway Limited (NYSE:CP) (Calgary, Alberta) and Union Pacific Corporation (NYSE:UNP) (Omaha, Nebraska) each reported substantial reductions in fourth-quarter 2015 earnings amid a slowing economy and lower energy prices, prompting Canadian Pacific to announce plans to cut 1,000 jobs this year. Both railways said they plan to reduce capital expenditures for 2016. Industrial Info is tracking projects for both railways with a combined value of more than $2.5 billion.
Canadian Pacific, a transcontinental railway which operates in Canada and the United States, reported C$319 million ($223 million) in fourth-quarter 2015 net income, down 29% from C$451 million ($316 million) in the same quarter of 2014. Revenue for the quarter ended December 31 totaled C$1.69 billion ($1.18 billion), a drop of nearly 4.5% from C$1.76 billion ($1.23 billion) a year earlier.
The railway cited substantial drops in revenue from shipments of U.S. grain (-15%), coal (-6%), potash (-19%), crude oil (-19%), metals and minerals (-21%) and others. Revenue increases were seen in shipments of Canadian grain (11%), fertilizers and sulfur (18%), forest products (20%), chemicals and plastics (7%) automotive products (7%) as well as domestic intermodal (13%) and international intermodal (1%).
Canadian Pacific Chief Executive Officer E. Hunter Harrison said: "Despite challenging economic conditions and lower commodity prices, we continue to focus on what we can control--lowering costs, creating efficiencies and improving service."
As such, railway executives said during the company's earnings conference call that it would cut 1,000 jobs this year. The railway said it plans $1.1 billion in capital expenditures for 2016, down from $1.52 billion in 2015.
For all of 2015, Canadian Pacific reported C$1.35 billion ($950 million) in net income, down 8.4% from C$1.48 billion ($1.04 billion) in 2015. Revenues for 2015 totaled C$6.71 billion ($4.7 billion), up 1.4% from C$6.62 billion ($4.63 billion) in 2014.
Canadian Pacific has been seeking a merger with Norfolk Southern Corporation (NYSE:NSC) (Norfolk, Virginia) but so far has been rebuffed by Norfolk Southern's governing board. For related information, see December 9, 2015, article - Canadian Pacific, Norfolk Southern Railway Merger Battle Heats Up.
Industrial Info is tracking 11 active Canadian Pacific projects worth $379 million. This includes $243 million in the construction phase, $6 million in the engineering phase and $131 million in the planning phase, where plenty of factors could increase, decrease or eliminate the expected spending. Projects include the railway's 2016 upgrade and rehabilitation program for the 1,725-mile rail system in Minnesota, valued at $54 million.
The drop in energy prices and the economic slowdown has hurt the railroad industry across North America. CSX Corporation (NYSE:CSX) (Jacksonville, Florida) last week reported 5% drop in fourth-quarter earnings. For related information, see January 14, 2016, article - CSX Railway Reports 5% Drop in Fourth-Quarter 2015 Earnings, Plans for $2.4 Billion Capex for 2016.
Union Pacific, which operates in 23 states in the western two-thirds of the United States, reported fourth-quarter 2015 net income of $1.1 billion, down 22% from $1.4 billion in fourth-quarter 2014. Fourth-quarter 2015 operating revenues were $5.2 billion, down 15% from $6.15 billion a year earlier.
Union Pacific Chief Executive Officer Lance Fritz said volumes decreased 9% in the quarter, offsetting pricing gains. The railway cited drops in revenue from chemicals (including crude oil) (-7%), agricultural products (-12%) intermodal (-14%), industrial products (-12%) and coal (-31%). Revenue from automotive product shipments was up 1%.
For all of 2015, the railway reported net income of $4.8 billion, down 7.6% from $5.2 billion in 2014. Operating revenue totaled $21.8 billion, down 9.2% from 2014. Looking forward, Fritz said: "Overall economic conditions, uncertainty in the energy markets, commodity prices, and the strength of the U.S. dollar will continue to have a major impact on our business this year."
Union Pacific said it plans $3.75 billion in capital expenditures for 2016, down from $4.3 billion in 2016. For related information, see November 13, 2015, article - North American Rail Earnings Mostly Down for Third-Quarter 2015.
Industrial Info is tracking 24 active Union Pacific projects worth $2.15 billion. This includes $1.74 billion for project still in the planning phase, $381 million for those in the construction phase and $25 million for one project in the engineering phase. Planned expenditures include $300 million for grassroot classification railyard in Red Rock, Arizona, which would feature a six-mile long railroad switching yard to improve efficiency and increase capacity. Kickoff is set for first-quarter 2017, with completion in third-quarter 2019.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Canadian Pacific, a transcontinental railway which operates in Canada and the United States, reported C$319 million ($223 million) in fourth-quarter 2015 net income, down 29% from C$451 million ($316 million) in the same quarter of 2014. Revenue for the quarter ended December 31 totaled C$1.69 billion ($1.18 billion), a drop of nearly 4.5% from C$1.76 billion ($1.23 billion) a year earlier.
The railway cited substantial drops in revenue from shipments of U.S. grain (-15%), coal (-6%), potash (-19%), crude oil (-19%), metals and minerals (-21%) and others. Revenue increases were seen in shipments of Canadian grain (11%), fertilizers and sulfur (18%), forest products (20%), chemicals and plastics (7%) automotive products (7%) as well as domestic intermodal (13%) and international intermodal (1%).
Canadian Pacific Chief Executive Officer E. Hunter Harrison said: "Despite challenging economic conditions and lower commodity prices, we continue to focus on what we can control--lowering costs, creating efficiencies and improving service."
As such, railway executives said during the company's earnings conference call that it would cut 1,000 jobs this year. The railway said it plans $1.1 billion in capital expenditures for 2016, down from $1.52 billion in 2015.
For all of 2015, Canadian Pacific reported C$1.35 billion ($950 million) in net income, down 8.4% from C$1.48 billion ($1.04 billion) in 2015. Revenues for 2015 totaled C$6.71 billion ($4.7 billion), up 1.4% from C$6.62 billion ($4.63 billion) in 2014.
Canadian Pacific has been seeking a merger with Norfolk Southern Corporation (NYSE:NSC) (Norfolk, Virginia) but so far has been rebuffed by Norfolk Southern's governing board. For related information, see December 9, 2015, article - Canadian Pacific, Norfolk Southern Railway Merger Battle Heats Up.
Industrial Info is tracking 11 active Canadian Pacific projects worth $379 million. This includes $243 million in the construction phase, $6 million in the engineering phase and $131 million in the planning phase, where plenty of factors could increase, decrease or eliminate the expected spending. Projects include the railway's 2016 upgrade and rehabilitation program for the 1,725-mile rail system in Minnesota, valued at $54 million.
The drop in energy prices and the economic slowdown has hurt the railroad industry across North America. CSX Corporation (NYSE:CSX) (Jacksonville, Florida) last week reported 5% drop in fourth-quarter earnings. For related information, see January 14, 2016, article - CSX Railway Reports 5% Drop in Fourth-Quarter 2015 Earnings, Plans for $2.4 Billion Capex for 2016.
Union Pacific, which operates in 23 states in the western two-thirds of the United States, reported fourth-quarter 2015 net income of $1.1 billion, down 22% from $1.4 billion in fourth-quarter 2014. Fourth-quarter 2015 operating revenues were $5.2 billion, down 15% from $6.15 billion a year earlier.
Union Pacific Chief Executive Officer Lance Fritz said volumes decreased 9% in the quarter, offsetting pricing gains. The railway cited drops in revenue from chemicals (including crude oil) (-7%), agricultural products (-12%) intermodal (-14%), industrial products (-12%) and coal (-31%). Revenue from automotive product shipments was up 1%.
For all of 2015, the railway reported net income of $4.8 billion, down 7.6% from $5.2 billion in 2014. Operating revenue totaled $21.8 billion, down 9.2% from 2014. Looking forward, Fritz said: "Overall economic conditions, uncertainty in the energy markets, commodity prices, and the strength of the U.S. dollar will continue to have a major impact on our business this year."
Union Pacific said it plans $3.75 billion in capital expenditures for 2016, down from $4.3 billion in 2016. For related information, see November 13, 2015, article - North American Rail Earnings Mostly Down for Third-Quarter 2015.
Industrial Info is tracking 24 active Union Pacific projects worth $2.15 billion. This includes $1.74 billion for project still in the planning phase, $381 million for those in the construction phase and $25 million for one project in the engineering phase. Planned expenditures include $300 million for grassroot classification railyard in Red Rock, Arizona, which would feature a six-mile long railroad switching yard to improve efficiency and increase capacity. Kickoff is set for first-quarter 2017, with completion in third-quarter 2019.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
