Canadian Pacific Railway Q4 Results Top Estimates

(RTTNews) - Canada's second largest railroad operator Canadian Pacific Railway Ltd. (CP, CP.TO) reported Thursday a profit for the fourth quarter that soared from last year, which was weighed down by hefty asset impairment charges. Stripping down the charges, adjusted earnings per share and quarterly revenues topped analysts' expectations.

"I am proud of the team at CP, which continues to build momentum as we exited the year with double-digit revenue growth and a sub-60 operating ratio, proving again our ability to control costs while growing the top line," CEO Hunter Harrison said in a statement.

The Calgary, Canada-based company reported record net income of C$451 million or C$2.63 per share for the fourth quarter, sharply higher than C$82 million or C$0.47 per share in the prior-year quarter, which primarily included C$1.45 per share of asset impairment charges.

Excluding items, adjusted net income for the quarter was C$460 million or C$2.68 per share, compared to last year's C$338 million or C$1.91 per share.

On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of C$2.58 per share for the quarter. Analysts' estimates typically exclude one-time items.

Canadian Pacific's total revenues for the quarter grew 10 percent to a quarterly record of C$1.76 billion from C$1.61 billion in the same quarter last year, and topped seventeen Wall Street analysts' consensus estimate of C$1.74 billion by a whisker.

Revenues from freight services increased 9 percent to C$1.72 billion, and other revenues grew 11 percent to C$41 million from the prior-year quarter.

Canadian Pacific's total revenue ton-miles or RTMs, for the fourth quarter was 39.50 billion, up 6 percent from the year-ago quarter, and total freight revenue per RTM grew 4 percent from last year to 4.35 cents.

Total carloads for the quarter edged up 1 percent from the year-ago quarter to 690,000, and total freight revenue per carload also grew 9 percent from the prior-year quarter to $2,489.

Operating income for the quarter soared to C$708 million from C$114 million in the year-ago quarter, and total operating expenses were C$1.05 billion, down 30 percent from the prior-year quarter.

Operating ratio for the quarter improved 3,310 basis points to the lowest quarterly operating ratio in the company's history of 59.8 percent from the year-ago quarter.

Looking ahead to fiscal 2015, the company expects earnings per share to grow more than 25 percent, on projected annual revenue growth of 7 to 8 percent from last year. The company also projects operating ratio below 62 percent for the year.

Street is currently looking for full-year 2015 earnings of $11.10 per share on annual revenue growth of 9.3 percent to $7.21 billion.

"In just two short years, CP has transformed from an industry laggard into a railway leader, and achieved its ambitious 2016 targets two full years ahead of schedule," Harrison added.

In Thursday's regular trading session, CP is currently trading at $186.71, up $2.75 or 1.49% on a volume of 0.37 million shares. In the past 52-week period, the stock has been trading in a range of $139.37 to $220.20.

CP.TO is currently trading on the Toronto stock exchange at C$230.00, up C$3.04 or 1.34% on a volume of 61,691 shares. In the past 52-week period, the stock has been trading in a range of C$155.02 to C$247.56.