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Canadian Pacific reported reduced first-quarter earnings April 21 as the railroad’s revenue was up 15.6% to C$2.04 billion compared with $1.77 billion in the same quarter a year ago.
The company’s revenue figure beat Wall Street expectations of C$1.96 billion, according to Zacks Equity Research.
The Calgary, Alberta-based transcontinental railroad reported net income was down nearly 5.8%, to C$409 million from C$434 million a year ago.
"These impressive Q1 2020 results are due to the efforts of our CP family, the leadership of our talented management team and strict adherence to the foundations of our precision scheduled railroading model," Keith Creel, CP President and CEO. $CP #ServiceExcellence #CPproud pic.twitter.com/SCuW51kYUe— Canadian Pacific (@CanadianPacific) April 21, 2020
Operating ratio improved significantly, to 59.2 from 69.3 in the 2019 period.
Operating ratio, or operating expenses as a percentage of revenue, is used to measure efficiency. The lower the ratio, the higher the company’s ability to generate profit.
CP continues to be one of several railroads embracing precision-scheduled railroading, which is designed to lower costs and improve overall efficiency by increasing the number of freight cars that are moving in the system on fewer trains.
“These impressive Q1 2020 results are due to the efforts of our CP family, the leadership of our talented management team and strict adherence to the foundations of our precision-scheduled railroading model,” CEO Keith Creel said. “The entire CP team is proud to deliver for our customers, shareholders and the broader economy today, and always.”
Still, company officials are beginning to sound the alarm over the coronavirus.
“Our operating team is tried and tested, and has shown exemplary leadership during a challenging period, including now managing the COVID-19 crisis,” Creel said. “The same operating model that produced record results for CP during good times now serves us well during challenging economic times.”
Revenue increased in seven of the nine freight sectors.:
- Grain: to C$418 million from $380 million last year.
- Fertilizers: to C$70 million from $57 million.
- Forest products: to C$78 million from $73 million.
- Energy, chemicals and plastics: to C$491 million from $315 million.
- Metals, minerals and consumer products: to C$189 million from $173 million.
- Automotive: to C$87 million from $76 million.
- Intermodal: to C$405 million from $380.
Coal slumped to C$150 million from $158 million in the same period last year, and potash dropped slightly to C$112 million from $114 million.
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