CP posts higher Q1 revenue, lower profit

Editor's note: This story was updated at 1:45 p.m. (CDT) to correct the Q1 2017 operating expense figure.

Canadian Pacific reported first-quarter 2018 revenue rose 4 percent to CA$1.66 billion compared to the same quarter a year ago. However, net income in the quarter fell to CA$348 million from CA$431 million as the Class I faced higher expenses during a challenging winter season.

CP posted diluted earnings per share (EPS) of CA$2.41 for the quarter, down 18 percent from CA$2.93 in Q1 2017. Adjusted diluted EPS during the quarter was CA$2.70, up 8 percent from CA$2.50 a year ago.

"This was a challenging quarter, as we battled extreme weather and unprecedented demand, specifically in the northern reaches of our network," said President and Chief Executive Officer Keith Creel in a press release.

Despite the challenges, CP's volumes as measured by revenue ton-miles climbed 6 percent and carloads rose 4 percent in the quarter compared to a year ago, Creel said.
 
"With the extraordinary winter weather behind us, we built a tremendous amount of momentum through March — one of our best months in recent history — positioning us well for the rest of the year," he added.

Total operating expenses in the quarter increased to CA$1.12 billion from CA$999 million in the same period last year.

CP reported a Q1 2018 operating ratio of 67.5 percent, an increase of 510 basis points and 190 basis points compared to last year's operating ratio and adjusted operating ratio, respectively. As of Jan. 1, CP adopted a new accounting standard for the presentation of pension retirement benefits, which resulted in a 430 basis point increase in CP's 2017 operating ratio, company officials said.

"We continue to produce results using the foundations of precision railroading and remain confident in our ability to deliver sustainable, profitable growth in 2018 and beyond," said Creel.