CP posts 2015 financial results, pledges $1.1 billion for capex in 2016

Canadian Pacific posted fourth-quarter 2015 net income of $319 million (in Canadian dollars) on revenue of $1.6 billion, compared with net income of $451 million on revenue of $1.7 billion for the same period in 2014, the company announced this morning.

Diluted earnings per share for the quarter were $2.08, down from $2.63 in 2014. Adjusted diluted earnings per share for the quarter in 2015 were $2.72, the highest ever for the period, CP officials said in a press release.

For the full year 2015, the Class I's reported diluted earnings per share were $8.40, while adjusted diluted earnings per share rose to a record $10.10, compared with 2014's adjusted earnings per share of $8.50.

Earnings missed analyst estimates, according to news media reports. For the quarter, the analyst consensus was $2.76 earnings per share. 

Net income for full-year 2015 was $1.35 billion on revenue of $6.7 billion, compared with net income of $1.476 billion on revenue of $6.6 billion in 2014. Total revenue last year set a record, CP officials said.

CP's operating ratio was 59.8 percent in fourth-quarter 2015, which matched the record-setting performance of 2014. For 2015, CP posted a best-ever full-year adjusted and reported operating ratio of 61 percent and 60 percent, which beat the previous record set in 2014 by 370 and 470 basis points, respectively, they said.

"Thanks to our committed, hard-working employees across the network, we have produced a record low operating ratio along with record earnings per share," said Chief Executive Officer E. Hunter Harrison. "Despite challenging economic conditions and lower commodity prices, we continue to focus on what we can control — lowering costs, creating efficiencies and improving service."

Although the company will face more headwinds in the North American economy in 2016, CP remains optimistic about its future growth, Harrison added.

"Despite the challenges, we expect 2016 to bring an operating ratio below 59 while generating double-digit EPS growth — a testament to the strength of our operating model and plan for the future," he said.

CP's full-year guidance for 2016 anticipates an operating ratio below 59 percent; double-digit earnings-per-share growth from full-year 2015 adjusted diluted earnings per share of $10.10; and capital expenditures of $1.1 billion.