Canadian Pacific Q3 Results Beat View; Ratifies Hourly-rate Agreement

(RTTNews) - Canada's second-largest railroad operator Canadian Pacific Railway Ltd. (CP, CP.TO) said Tuesday that its revenue and adjusted earnings per share for the third quarter beat analysts' estimates. The results were aided by higher freight revenue and lower expenses.

Canadian Pacific also said it has ratified a multi-year collective agreement with its 450 U.S. engineers represented by the Brotherhood of Locomotive Engineers and Trainmen or BLET. The company noted that the new hourly-rate agreement will end a mileage-based wage system from the steam engine era.

It will also provide CP with increased flexibility and transparency, while providing the employee with a cycle with two consecutive days off and the best wages in the industry.

Canadian Pacific's total revenue ton-miles or RTMs for the third quarter were 36.14 billion, down 4 percent from the year-ago quarter. However, total freight revenue per RTM grew 6 percent from last year to 4.61 cents.

Total carloads for the quarter declined 3 percent to 669,000, while freight revenue per carload increased 5 percent to $2,493.

Operating ratio, a key efficiency measure, improved 690 basis points from last year to 55.9 percent.

The Calgary, Canada-based company's third-quarter net income was C$323 million or C$2.04 per share, down from C$400 million or C$2.31 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter C$2.69 per share, compared to last year's $C2.31 per share.

On average, 26 analysts polled by Thomson Reuters expected the company to earn C$2.68 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues for the quarter rose 2 percent to C$1.71 billion from C$1.67 billion in the same quarter last year and beat analysts' consensus estimate of C$1.69 billion.

Revenues from freight services increased 2 percent from the prior-year quarter to C$1.67 billion, while non-freight revenues edged up to C$42 million.

In Tuesday's regular session, CP.TO is trading at C$188.99, down $1.23 or 0.65 percent on a volume of 19,371 shares.