Canadian Pacific Railway Ltd expects double-digit earnings growth in 2019, the country’s second-biggest rail operator said on Wednesday, lifted by strong pricing and growing demand for shipments of crude and other commodities.
The Calgary-based company, which got a sizeable revenue lift from crude in its fourth quarter, said it expects crude shipments will increase to an annual run rate of approximately 120,000 rail cars in the second quarter from about 100,000 currently.
Reporting a bigger-than-expected profit, despite higher fuel costs, CP also forecast double-digit growth in diluted earnings per share in 2019, from $14.51 in 2018, and mid-single-digit volume growth.
“The two most striking things were they did well on the pricing… and they did just a fantastic job of keeping their costs in line,” Edward Jones analyst Dan Sherman told Reuters. “It sounds like they just see pretty solid sailing going forward.”
CP’s operating ratio, a closely watched productivity metric that measures operating expenses as a percentage of revenue, improved by 370 basis points to 56.5 per cent in the fourth quarter.
(Reuters)
