Canadian Pacific Railway have reported strong first quarter earnings, posting significant year-over-year improvements in total revenues, net income and operating efficiency.
Reported net income in the three-month period ending March 31 was $217 million, or $1.24 per share, compared to $142 million, or 82 cents per share, during the same period in 2012.
That’s a 51 percent increase over the first quarter of 2012.
Total revenues at CP were $1.495 billion, up nine percent from the first quarter of 2012.
The company’s first quarter operating ratio improved to 75.8 percent, down from 80.1 percent a year earlier.
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Operating ratio is a key measurement of railway efficiency. It expresses operating expenses as a percentage of revenue. Lower operating ratios reflect a more efficient railroad.
CP’s operating ratio fell below 75 percent in the fourth quarter of 2012, but operating challenges in January, February and March contributed to an increase in the ratio in early 2013.
CP has indicated that it would like to achieve a sustainable operating ratio in the mid-60s by 2016.
“CP delivered the best first quarter results in its history despite challenging winter conditions,” said chief executive officer Hunter Harrison.
“There remains a lot of work to do as we continue to make significant changes to our operating model. With a very strong start to the year … we are on pace toward the best year-end financial and operating performance in CP’s history.”
Company officials said workforce adjustments at CP will continue this year.
The company has reduced its workforce by 3,400 people since Harrison was appointed CEO last summer.
Shortly after joining CP, Harrison announced the company would cut 4,500 jobs by 2016 in an effort to make the company the most efficient railway carrier in North America.
Last month, he hinted that job cuts could approach 6,000, a reduction of nearly 30 percent from early 2012 when 19,500 were on the payroll.
CP’s 2013 earnings per share forecast remains unchanged at 40 percent.
