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The words “solid” and “strong” were bandied about by Canadian Pacific senior officers yesterday to describe the Class I’s fourth quarter and full-year financial results. During an earnings webcast and teleconference, they provided reasons for those characterizations, including double-digit revenue growth.

Despite severe weather during the fourth quarter — some of which caused track washouts in southern Alberta — total revenue rose 13 percent to $1.3 billion, adjusted operating income jumped 34 percent to $299 million, adjusted diluted earnings per share climbed 51 percent to $1.12, volume increased 9 percent to 673,500 units and the operating ratio improved 3.6 points to 77 compared with fourth-quarter 2009 results.

CP drove down its operating ratio because the organization remained focused on three priorities — “safety, asset velocity and productivity,” said President and Chief Executive Officer Fred Green.

“We are ramping up resources and making long-term investments in our company to meet growing demand, further improve customer service and achieve our three- to five-year target of a lows 70s operating ratio,” he said.

Quarterly adjusted grain revenue rose 13 percent as volume inched up 4 percent, sulphur/fertilizers revenue soared 58 percent as volume ballooned 50 percent, merchandise revenue climbed 19 percent as volume increased 9 percent and intermodal revenue rose 11 percent as volume went up 10 percent. Revenue ton-miles (RTM) climbed 14 percent year over year to 32.9 million — the sixth-straight quarter of sequential RTM growth, said Chief Marketing Officer Jane O’Hagan.

Meanwhile, adjusted operating expenses rose 10 percent to $1 billion compared with fourth-quarter 2009 costs. Compensation/benefit costs increased 14 percent and fuel costs ballooned 28 percent as the average diesel price per gallon rose from fourth-quarter 2009’s $2.28 to $2.68, said Chief Financial Officer Kathryn McQuade.

For the full year, CP reported total revenue of $5 billion, up 13 percent; adjusted operating income of $1.1 billion, up 39 percent; adjusted diluted earnings per share of $3.88, up 54 percent; and adjusted operating expenses of $3.9 billion, up 12 percent compared with 2009. The Class I’s operating ratio improved 4.1 points to 77.6.

“We’re pleased with CP’s progress, but there’s more to do,” said Green, adding that the Class I continues to expect modest economic recovery.

During the conference, McQuade also reviewed CP’s proposed 2011 capital spending budget, which is expected to range between $950 million and $1.05 billion. The railroad is budgeting $680 million for basic track infrastructure renewal; $200 million for productivity and network enhancements; $80 million for information technology needs; and $40 million for regulator work, including positive train control.

— Jeff Stagl