Mark Szakonyi, Daily Content Editor | Jan 26, 2012 1:26PM EST
Canadian Pacific Railway saw fourth-quarter profit rise 19 percent year-over-year to $221 million, but the railroad’s operating ratio worsened as management faces pressure from an activist investor to increase profitability.
The railroad’s revenue expanded 8.8 percent year-over-year to $1.4 billion, as the railroad exercised its pricing power on nearly flat carload traffic. The average revenue per carload rose nearly 6.7 percent to $2,034.
CP’s operating ratio rose to 78.5 percent in the fourth quarter, from 77 percent in the same period a year ago. CP director says the company will bring the operating ratio to the low 70s within three years, but activist investor William Ackman wants the ratio down to 65 within the same period.
Ackman is waging a proxy fight with CP in an effort to add his slate of five directors, which includes himself, and replace the CEO with former Canadian National Railway CEO E. Hunter Harrison.
The railroad’s annual profit fell 14 percent year-over-year to $570.4 million despite revenue growing 2.7 percent to nearly $5.2 billion.
-- Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @Szakonyi_JOC
