Canadian Pacific Railway Limited (CP,CP.TO), an operator of transcontinental railway in Canada and the US, reported Tuesday an increase in net profit for the third quarter, helped mainly by gains related to two significant real estate sales. Meanwhile, revenues for the quarter declined sharply.
For the third quarter, the Calgary, Canada-based company's net income was C$195.4 million or C$1.16 per share compared to C$170.7 million or C$1.10 per share in the previous-year quarter.
On an adjusted basis, earnings for the quarter plunged to C$144 million or C$0.85 per share from C$184 million or C$1.19 per share a year ago.
On an average, 13 analysts polled by Thomson Reuters expected the company to earn $0.75 per share for the quarter. Analysts' estimates typically exclude special items.
Adjusted results exclude foreign exchange gain and loss on long-term debt and other specified items after tax as well as include sale of two large properties, which together had an impact on the company's earnings of C$0.31 per share.
During the quarter, the company completed two significant real estate sales, resulting in gains of C$79.1 million, or $68.1 million after tax. Windsor Station, the company's former head office in Montreal, was sold for proceeds of $80.0 million, including the assumption of a mortgage of $16 million due in 2011. The company also sold land in Western Canada for transit purposes for proceeds of $43 million. The company noted that it will continue to occupy a portion of Windsor Station through a lease for a 10-year period after the sale. Consequently, part of the transaction is considered to be a sale-leaseback and a gain of $19.5 million related to this part of the transaction has been deferred and is being amortized over the remainder of the lease term, Canadian Pacific said.
Additionally, in the three-month period, Canadian Pacific incurred a foreign exchange loss on long-term debt of C$18 million after tax, against a foreign exchange gain on long-term debt of C$6 million after tax in the prior-year period.
Revenues for the third quarter plunged to C$1.09 billion from C$1.26 billion in the third quarter of fiscal 2008. Analysts expected the company to generate revenues of C$1.05 billion for the quarter.
Canadian Pacific's revenues from freight services were C$1.06 billion compared with C$1.24 billion, while other revenues rose to C$26.7 million from C$25.2 million a year earlier.
On a pro forma basis, the company's total revenue ton-miles, or RTMs, for the quarter was 28,021 million compared with 32,786 million, and freight revenue per RTM slipped to 3.79 cents from 4.09 cents a year earlier. Total carloads dropped to 602.4 thousand from 736.8 thousand, and freight revenue per carload was C$1,762 versus C$1,819 in the last-year period.
During the quarter, operating expenses incurred by Canadian Pacific fell to C$827.0 million from C$964.9 million in the 2008-year period.
Commenting on the results, president and chief executive officer Fred Green said, "We delivered strong cost control and tight resource management this quarter while traffic volumes remained under pressure."
In the preceding second quarter, the company had reported net income of C$157.3 million versus C$154.7 million a year earlier. On a per share basis, earnings had fallen to C$0.93 from C$1.00 in the prior-year quarter. Revenues for the second quarter had decreased to C$1.02 billion from C$1.22 billion in the second quarter of fiscal 2008.
For the nine-month period, Canadian Pacific's net income was C$415.2 million or C$2.50 per share compared with C$416.1 million or C$2.68 per share in the same period last year. Adjusted net income for the nine-month period edged down to C$415 million or C$2.50 per share from C$416 million or C$2.68 per share last year. Year-to-date revenues slumped to C$3.18 billion from C$3.63 billion in the previous year.
In Tuesday's regular trading session, CP is currently trading on the New York Stock Exchange at $45.06 per share down $0.60 or 1.31% on a volume of 293,691 shares.
In Tuesday's regular trading session, CP.TO is currently trading on the Toronto Stock Exchange at C$48.08 per share down C$0.65 or 1.33% on a volume of 143,129 shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.