Well-oiled CP joins CN in beating profit forecasts

Canadian Pacific Railway joined larger rival Canadian National Railway in reporting third- quarter profit above analysts’ estimates as the companies improved efficiency and got a boost from oil shipments.

Net income jumped 45 per cent to $324 million Cdn, or $1.84 a share, Calgary-based Canadian Pacific said Wednesday. Profit excluding $7 million in income tax expenses surged to $1.88 a share, beating the $1.71 average of estimates in a Bloomberg survey of 26 analysts.

Both companies benefited from growing demand to haul crude oil while bolstering operating ratio, a measure of railway efficiency that com- pares expenses to revenue. After Canadian National Tuesday reported a 17-percent increase in petroleum and chemicals sales, Canadian Pacific disclosed the same gain in industrials and consumer products revenue — a category that includes crude shipments.

“Crude by rail has a lot of torque to it,” said John Stephenson, a senior vice- president at First Asset Investment Management in Toronto. “It’s been a strong contributor of revenue growth.”

Revenue increased 5.7 per cent to $1.53 billion, Canadian Pacific reported. The company said chief financial officer Brian Grassby will retire at year end. A search process is underway and announcement on a new CFO will probably be made shortly.