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Growth in five of its seven business lines helped Canadian Pacific Railway increase second-quarter revenue 10 percent — and eclipse the $1 billion mark — and boost net income 146 percent to $84 million compared with second-quarter 2003. Excluding foreign exchange gains and losses on long-term debt and a 2003 special charge, CPR's net income increased 23 percent to $104 million.

Today, the Class I also reported second-quarter operating income of $221 million, up 19 percent, and a quarterly operating ratio of 78, a 1.7 point improvement compared with similar 2003 data.

However, quarterly operating expenses increased 7.8 percent to $784 million because compensation and benefits, and depreciation and amortization costs rose 13 percent, and purchased services expenses increased 7 percent.

"We handled significantly higher volumes of freight and still maintained a fluid level of operations," said CPR President and Chief Executive Officer Rob Ritchie in a prepared statement. "There has been steady improvement in most of our productivity measures and the overall results we expected to see are materializing."

CPR continued to implement its MaxStax initiative, which is designed to increase intermodal efficiency and margins. The railroad has converted about 80 percent of its intermodal fleet to high-capacity, double-stack cars and is nearing its goal of improving intermodal train productivity 16 percent.

During the year's first half, CPR's net income dropped 37 percent to $107 million because of a foreign exchange loss on long-term debt and operating expenses increased 4.5 percent to $1.55 billion.

However, revenue rose 5.5 percent to $1.9 billion and operating income increased 11 percent to $337 million compared with first-half 2003. CPR's firs-half operating ratio improved 0.9 points to 82.2.

"We expect freight volumes to remain robust for the remainder of 2004," said Ritchie. "To help handle the workload, we added 41 fuel-efficient, high-performance locomotives in the second quarter, and will bring another 34 online in the fourth quarter."