CP Rail Records Profit Due to Higher Freight Revenue

This article was last updated on April 16, 2022

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Canada’s second largest railway company, Canadian Pacific Railway, has released a report unveiling that it acquired five-fold jump in fourth-quarter profit, as freight revenue increased by 7 percent. Moreover, there was an increase in shipping of crude oil via railroads across North America amid a boom in oil production that is exceeding pipeline capacity. However, multiple tragic train derailments in the past year alone have resulted in intense scrutiny on the industry’s safety protocols.

In an announcement made by CP Rail on Wednesday, it went on to reveal that adjusted earnings of 2014 will increase by 30 percent or more and revenue will grow 6-7 percent, in comparison with 2013. The company calculated that its net profit increased up to C$82 million ($73 million), or 47 Canadian cents per share, in the quarter ending December 31, compared to C$15 million, or 8 Canadian cents per share, a year earlier. Apart from the pre-tax asset impairment charge of C$435 and other one-time items, the company found to have produced C$1.91 per share. Apart from that, analysts are expecting earnings of C$1.95 per share along with an increase in revenue by 7 percent and up to C$1.6 billion.

CP Rail mentioned that its adjusted operating ratio has improved 890 basis points to 65.9 percent, where the operating ratio is the percentage of revenue needed to maintain operations. The ratio is considered a key measure of railroad efficiency and the lower it is the better. The company revealed its forecast operating ratio to be 65 percent or lower in 2014.

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