Acquisition Boosts Canadian Pacific Earnings

Canadian Pacific Railway’s profit of $183 million in the third quarter increased 14 percent from $161 million in 2008. Revenue fell 14 percent from $1.2 billion a year ago to $1 billion in the quarter.

The railroad’s acquisition of the Dakota, Minnesota & Eastern Railroad gave a needed push to volume and significantly affected comparison with last year’s earnings. Comparison was also affected by impairment charges of $19 million last year.

On a pro forma basis, total revenue fell 20 percent from $1.3 billion to $1 billion. Operating expenses also fell 20 percent from $940 million, and profit decreased 22 percent from $173 million to $135 million. The operating ratio increased 20 basis points to 76 percent, CP said.

"We delivered strong cost control and tight resource management this quarter while traffic volumes remained under pressure," said Fred Green, president and CEO. "We are continuing to refine and optimize our business processes to further drive structural cost improvements. This increases our flexibility and positions us well to respond to changes in volumes as the economy begins to recover."