Canadian Pacific Railway Limited (CP) has reported a record low operating ratio for both its 2016 fourth quarter and full year. The fourth quarter operating ratio was 56.2 percent and the full year operating ratio was 58.6 percent.
The railway’s revenues for the full year of 2016 were C$6.23 billion, a decline of 7 percent compared to revenues of C$6.71 billion for 2015. Diluted earnings per share (EPS) increased 27 percent to $10.63 while adjusted diluted EPS increased 2 percent to $10.29.
Fourth quarter revenues were C$1.64 billion compared to C$1.69 billion for the fourth quarter of 2015, a drop of 3 percent. Diluted EPS was $2.61, up 25 percent from last year, and adjusted diluted EPS increased 12 percent to $3.04.
“While the fourth quarter was weighed down by challenging operating conditions, including unexpected and extreme weather on the West Coast that compounded the impact of an already delayed grain harvest, it once again highlighted our resiliency and ability to operate efficiently under tough conditions,” said CP’s CEO E. Hunter Harrison. “I am particularly proud of our people who worked tirelessly over the last three months of 2016 to deliver for our customers in a safe and efficient manner."”
Harrison added, “2016 featured stiff economic headwinds and a challenging volume environment, headlined by a precipitous decline in crude oil shipments and weakness in grain movements, particularly in the first half. These are not excuses, but opportunities to showcase our operating ability and leadership. As we have shown over the last four years, the precision railroading model works in all economic conditions.”
“With continued margin improvement and an anticipated increase in volumes, led by a stronger bulk outlook, we expect adjusted diluted EPS growth to be in the high single-digits,” said Keith Creel, CP's president and chief operating officer. “With our strong leadership team, plus the commitment and discipline shown by the thousands of men and women every day at CP, the franchise is well positioned for 2017 and beyond.”