Skip to main content

CP reports record fourth-quarter; sustainable, profitable growth continues into 2019

Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) today announced its fourth-quarter results, including revenues of $2.0 billion, an operating ratio of 56.5 percent and record operating income of $874 million(1). Fourth-quarter diluted earnings per share ("EPS") decreased 43 percent to $3.83 from $6.77, however, adjusted diluted EPS rose 41 percent to a new quarterly record of $4.55 from $3.22 a year ago.


  • Revenues increased 17 percent to $2.0 billion, from $1.7 billion
  • Operating ratio improved by 370 basis points to 56.5 percent(1)
  • Operating income rose 28 percent to $874 million, from $682 million(1)

"CP's impressive fourth-quarter operating results are a testament to the hard work and dedication of our 13,000-strong CP family - who continue to safely and efficiently deliver for our customers and the North American economy," said Keith Creel, CP President and CEO. "The power of the CP operating model is evident in the strong performance across the company. We set records across many lines of business in 2018, including Canadian grain, potash and domestic intermodal."

CP continues to focus on a disciplined approach to sustainable, profitable growth - a plan rooted in the foundations of precision scheduled railroading. This approach in 2018 enabled CP to deliver its highest-ever revenues, lowest-ever yearly operating ratio and a 13th consecutive year leading Class 1 railways with the lowest train accident frequency.


  • Revenues increased 12 percent to $7.3 billion from $6.6 billion
  • Operating ratio improved to a record 61.3 percent(1)
  • Diluted EPS decreased 17 percent to $13.61 from $16.44, while adjusted diluted EPS rose 27 percent to $14.51 from $11.39

"2018 was a record by almost every measure and will be remembered as a watershed year for our company," said Creel. "Our record operating results are proof that the CP family is committed to making this company the best it has ever been."


  • Double-digit adjusted diluted EPS growth versus 2018 adjusted diluted EPS of $14.51
  • Mid-single digit volume growth, as measured in revenue ton miles
  • Capital expenditures of $1.6 billion

CP's guidance is based on the following key assumptions:
  • U.S.-to-Canadian dollar exchange rate of approximately 1.30
  • Effective tax rate of 25.5 to 26 percent
  • Other components of net periodic benefit recovery to increase by $11 million versus 2018
  • No material land sales

"Each day I look at our team of railroaders and I am proud to be their CEO," Creel said. "We are entering 2019 with tremendous momentum and a commitment to operating the precision scheduled railroading model in its true form."

CP will discuss its results with the financial community in a conference call beginning at 4:30 pm eastern time (2:30 pm mountain time) on January 23, 2019.

(1) 2017 comparative quarter's operating ratio was restated from 56.1% to 60.2% and operating income was restated from $753 million to $682 million. 2017 comparative year's operating ratio was restated from 57.4% to 61.6% and adjusted operating ratio was restated from 58.2% to 62.4%. These restatements reflect the adoption of the new accounting standard for the presentation of Other components of net periodic benefit recoveries, which is discussed further in Note 2 Accounting changes in CP's Interim Consolidated Financial Information for the three months and year ended December 31, 2018.

Conference Call Access

Toronto participants dial in number: 1-647-427-7450
Operator assisted toll free dial in number: 1-888-231-8191
Callers should dial in 10 minutes prior to the call


We encourage you to access the webcast and presentation material in the Investors section of CP's website at 

A replay of the fourth-quarter conference call will be available by phone through to February 13, 2019 at 416-849-0833 or toll free 1-855-859-2056, password 7988108.

Access to the webcast and audio file of the presentation will be made available at

Non-GAAP Measures

For information regarding non-GAAP measures, including reconciliations to the nearest GAAP measures, see the attached supplementary schedule Non-GAAP Measures. In this news release, CP has provided a forward looking non-GAAP measure. It is not practicable to provide a reconciliation to a forward-looking reported diluted EPS, the most comparable GAAP measure, due to unknown variables and uncertainty related to future results.

Note on forward-looking information

This news release contains certain forward-looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking information may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "should" or similar words suggesting future outcomes. To the extent that CP has provided guidance using non-GAAP financial measures, the Company may not be able to provide a reconciliation to a GAAP measure, due to unknown variables and uncertainty related to future results. This news release contains forward-looking information relating, but not limited to, the success of our business, our operations, priorities and plans, anticipated financial and operational performance, including our 2019 full-year guidance, expected RTM and adjusted diluted EPS growth, business prospects, planned capital expenditures, programs and strategies. The purpose of the 2019 adjusted diluted EPS growth projection is to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes.

The forward-looking information contained in this news release is based on current expectations, estimates, projections and assumptions, having regarding to CP's experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: foreign exchange rates, effective tax rates, land sales and pension income (including as specified in this news release); North American and global economic growth; commodity demand growth; sustainable industrial and agricultural production; commodity prices and interest rates; performance of our assets and equipment; sufficiency of our budgeted capital expenditures in carrying out our business plan; applicable laws, regulations and government policies; the availability and cost of labour, services and infrastructure; and the satisfaction by third parties of their obligations to CP. Although CP believes the expectations, estimates, projections and assumptions reflected in the forward-looking information presented herein are reasonable as of the date hereof, there can be no assurance that they will prove to be correct.

Undue reliance should not be placed on forward-looking information as actual results may differ materially from those expressed or implied by forward-looking information. By its nature, CP's forward-looking information involves inherent risks and uncertainties that could cause actual results to differ materially from the forward looking information, including, but not limited to, the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks associated with agricultural production, such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; changes in commodity prices; uncertainty surrounding timing and volumes of commodities being shipped via CP; inflation; changes in laws, regulations and government policies, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; trade restrictions or other changes to international trade arrangements; climate change; and various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes. The foregoing list of factors is not exhaustive. These and other factors are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Information" in CP's annual and interim reports on Form 10-K and 10-Q.

The forward-looking information contained in this news release is made as of the date hereof. Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, or the foregoing assumptions and risks affecting such forward-looking information, whether as a result of new information, future events or otherwise.

About Canadian Pacific

Canadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit to see the rail advantages of CP. CP-IR


 Investment Community

Maeghan Albiston
See all news