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Like the other Class Is that have reported third-quarter financial results so far, Canadian Pacific weathered the recession because of cost controls and productivity gains.

Net income rose 14 percent to $183 million and diluted earnings per share increased 5 percent to $1.09 compared with third-quarter 2008 figures. However, excluding a foreign exchange gain and loss on long-term debt and other specified after-tax items — including the sale of two properties — adjusted income declined 22 percent to $135 million and adjusted diluted earnings per share fell 29 percent to 80 cents.

Total carloads tumbled 18 percent to 602,400 units and total revenue dropped 20 percent to $1 billion compared with third-quarter 2008 data. Grain revenue rose 7 percent to $262 million, but intermodal revenue dropped 26 percent to $267.5 million, coal revenue declined 25 percent to $112.2 million, industrial and consumer products revenue decreased 23 percent to $179.7 million, sulfur and fertilizers revenue tumbled 36 percent to $75.3 million and automotive revenue fell 29 percent to $55.9 million.

But CP’s operating ratio improved slightly, dropping 0.3 points to 76. And due to ongoing efforts to rein in costs, the Class I’s operating expenses declined 20 percent to $776 million compared with third-quarter 2008 expenses. Although costs tied to compensation and benefits rose 3 percent to $300.9 million, fuel expenses plunged 51 percent to $126 million, purchased services and other costs decreased 7 percent to $142.2 million, and material costs dropped 7 percent to $43 million.

“We are continuing to refine and optimize our business processes to further drive structural cost improvements,” said CP President and Chief Executive Officer Fred Green in a prepared statement. “This increases our flexibility and positions us well to respond to changes in volumes as the economy begins to recover.”