CP Rail's profit jumps as freight revenue rises, costs fall

(Reuters) - Canadian Pacific Railway , Canada's No. 2 rail operator, reported a higher profit for the third quarter as freight revenue improved and operating costs fell.

The U.S.-listed shares of the company rose nearly 2 percent before the bell.

Canada's largest rail operator, Canadian National Railway Co , also reported a jump in revenue on Tuesday, reflecting higher freight volumes due to strong energy markets and a North American economic recovery.

CP said operating ratio improved 820 basis point to 65.9 percent in the quarter. The ratio improved by 80 basis points to 59.8 percent for Canadian National Railway.

Operating ratio is a key barometer of efficiency in the railroad industry and is the percentage of revenue needed to maintain operations.

CP said Chief Financial Officer Brian Grassby will be retiring but would remain till the end of the year.

Net income climbed to C$324 million ($315 million), or C$1.84 per share, from C$224 million, or C$1.30 per share, a year earlier. Excluding items, the company earned C$1.88 per share.

Costs fell 6 percent.

Revenue rose 6 percent to C$1.5 billion.

Analysts had expected earnings of C$1.72 per share, according to Thomson Reuters I/B/E/S.

CP's shares closed at C$134.74 on the Toronto Stock Exchange on Tuesday. They ended at $130.96 on the New York Stock Exchange.

(Reporting by Solarina Ho and Sneha Banerjee in Bangalore; Editing by Sriraj Kalluvila)

• Company Earnings
• Stocks & Offerings
• Canadian Pacific Railway
• Canadian National Railway

Source: http://news.yahoo.com/cp-rails-profit-jumps-freight-revenue-rises-costs-125542243--finance.html
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