Strong quarter for CP Rail

Article Excerpt

CANADIAN PACIFIC RAILWAY LTD. $232.18 (Toronto symbol CP; Shares outstanding: 170.6 million; Market cap: $39.7 billion; TSINetwork Rating: Average; Dividend yield: 0.6%; www.cpr.ca) earned a record $400 million in the three months ended September 30, 2014, up 20.8% from $331 million a year earlier. Earnings per share rose 22.9%, to $2.31 from $1.88, on fewer shares outstanding. Revenue gained 8.9%, to a record $1.67 billion from $1.53 billion. CP saw strong revenue gains from shipping grain, crude oil, metals and consumer products. That offset declines in shipments of fertilizer, coal and automotive products. The company also continues to benefit from its plan to improve efficiency with new locomotives, better tracks and software that optimizes train loads and speeds. Thanks to these moves, CP’s operating ratio improved to 62.8% in the latest quarter from 65.9% a year ago. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.) CP Rail is a buy. buy…