27 January 2009
Canadian Pacific Announces 2008 Results
Calgary Alberta - Canadian Pacific Railway Limited
announced its fourth-quarter and full-year 2008 results today. Net income was
$201 million down from $342 million in fourth-quarter 2007 and diluted
earnings per share were $1.29, down from $2.21 in fourth-quarter 2007. This
decrease is primarily due to a future tax benefit that was recorded in
fourth-quarter 2007. Excluding the impact of foreign exchange on long-term
debt and other specified items, diluted earnings per share were $1.15, down
$0.05 or four percent. Fourth-quarter operating income (a non-GAAP measure)
was $305 million, essentially flat despite a charge of $23 million in 2008 as
a result of a federal court decision regarding the retroactive adjustment to
the grain revenue entitlement related to the 2007/2008 crop year.
SUMMARY OF FOURTH-QUARTER 2008 COMPARED WITH FOURTH-QUARTER 2007
- Total revenues increased nine per cent to $1.3 billion from $1.2 billion;
- Operating expenses were $995 million an increase of 13 per cent from $883 million;
- Excluding foreign exchange gains and losses on long-term debt and
other specified items: Diluted earnings per share decreased to
$1.15 from $1.20; and - Income decreased four percent to $178
million from $185 million.
At the end of October, following the US Surface Transportation Board's
approval, CP assumed control of the Dakota, Minnesota & Eastern Railroad
(DM&E). For the first ten months of 2008, the DM&E was accounted for on an
equity basis. The results for the final two months are consolidated on a
line-by-line basis.
The impact of a stronger US dollar in the fourth quarter increased both
freight revenues and operating expenses that were denominated in US currency.
Relative to the US dollar, the Canadian dollar weakened from $0.98 per US
dollar in the fourth quarter of 2007 to $1.17 per US dollar on average during
the fourth quarter of 2008.
Freight revenues were up 10 percent in the fourth quarter on foreign
exchange, continued pricing strength inclusive of fuel recoveries, and DM&E
revenues for the last two months of the quarter and partially offset by the
retroactive grain adjustment and lower volumes. Revenues from industrial and
consumer products increased 37 percent, with grain revenues increasing 19 percent
and coal and automotive both improving six percent. Intermodal was flat
year-over-year. These gains were offset somewhat by decreases in forest
products and sulphur and fertilizers of seven and three percent respectively.
Operating expenses increased 13 percent in the fourth quarter driven
mainly by foreign exchange and the inclusion of two months of DM&E expenses,
partially offset by declining volumes and the results of CP's cost management
actions.
The complete report is available at Canadian Pacific.
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