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Yesterday, Canadian Pacific Railway reported new fourth-quarter and full-year earnings records, becoming the sixth Class I to release banner financial results this month. In 2005, CPR earned all-time-high net income of $477 million, a 32 percent increase compared with 2004. Revenue totaling $3.9 billion rose 13 percent and the railroad’s annual operating ratio of 77.2 improved 2.6 points.

In addition, the railroad’s annual operating income of $1 billion (in Canadian dollars) — which increased 27 percent compared with 2004 — broke the billion-dollar mark for the first time. However, annual operating expenses of $3 billion rose 9 percent, primarily because of escalating fuel costs.

“We told shareholders we would grow this business by double digits, generate higher yield, recover fuel cost increases and grow share earnings significantly,” said CPR Chief Executive Officer Rob Ritchie in a prepared statement. “We met every one of these commitments.”

During the fourth quarter, CPR earned record net income (excluding foreign exchange gains and long-term debt losses) of $148 million, a 45 percent increase compared with fourth-quarter 2004. Revenue rose 14 percent to $966 million, operating income increased 30 percent to $265 million and CPR’s operating ratio improved 3.1 points to 74.1.

However, quarterly operating expenses of $769 million increased more than 9 percent compared with fourth-quarter 2004 mostly because of fuel costs. CPR tried to recover diesel costs through fuel surcharges and hedging.