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CP Rail reports $664M Q4 profit, up from $545M a year ago

A Canadian Pacific Rail maintenance worker climbs onto a locomotive at the company's Port Coquitlam yard east of Vancouver, B.C., on Wednesday May 23, 2012. .
A Canadian Pacific Rail maintenance worker climbs onto a locomotive at the company's Port Coquitlam yard east of Vancouver, B.C., on Wednesday May 23, 2012. . Darryl Dyck/The Canadian Press

Canadian Pacific Railway Ltd. says it earned a fourth-quarter profit of $664 million, up from a profit of $545 million in the same period a year earlier.

The railway says its profit amounted to $4.82 per diluted share for the quarter ended Dec. 31, up from $3.83 per diluted share a year ago.

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Revenue for the quarter totalled nearly $2.07 billion, up from nearly $2.01 billion in the same quarter a year earlier.

On an adjusted basis, CP Rail says it earned $4.77 per diluted share in the quarter, up from $4.55 per diluted share a year ago.

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Analysts on average had expected a profit of $4.66 per share for the quarter and $2.02 billion in revenue, according to financial markets data firm Refinitiv.

CP Rail’s operating ratio, an industry metric where a lower ratio means more efficient operations, rose to 57.0 per cent for the last three months of 2019 compared with 56.5 per cent in the fourth quarter of 2018.

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“CP’s strong operational performance and commitment to controlling costs enabled the railway to be successful despite headwinds to our bulk franchise,” CP Rail chief executive Keith Creel said in a statement.

“We continue to take a disciplined approach to sustainable, profitable growth – a plan rooted in the foundations of precision scheduled railroading. This approach in 2019 enabled CP to once again deliver its highest-ever revenues and the lowest-ever yearly operating ratio.”

For the full year, CP Rail reported a profit of $2.44 billion or $17.52 per diluted share on $7.61 billion in revenue. That compared with a profit of $1.95 billion or $13.61 per diluted share on $7.15 billion in revenue in 2018.

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The railway’s operating ratio for 2019 improved to 59.9 per cent compared with 61.3 per cent in 2018.

On an adjusted basis, CP Rail said it earned $16.44 per diluted share in 2019, up from an adjusted profit of $14.51 per diluted share in 2018.

In its outlook for 2020, the railway said it expected single-digit to low double-digit adjusted diluted earnings per share growth relative to 2019.

Volume growth this year is expected to be in the mid-single digits as measured by revenue ton miles, while capital expenditures are forecast at $1.6 billion.