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Late harvest bites into CPR grain handle

Late harvests in Canadian Pacific Railway’s (CPR) catchment areas yielded a lower grain handle, but higher revenue per grain carload, in its third fiscal quarter.

CPR on Tuesday reported overall net income of $172.7 million on revenues of $1.26 billion in its Q3 ending Sept. 30, down from $218.6 million on $1.19 billion in the year-earlier period.

But while the company saw improved revenue in the quarter in most of its market sectors compared to its 2007 Q3, including sulphur and fertilizers (up 7.6 per cent) and intermodal (up 11.3 per cent), grain revenue dropped 4.3 per cent, CPR reported.

Specifically, CPR handled 87,700 carloads of grain in its 2008 Q3, down 13.1 per cent from 100,900 in the year-earlier period, “due mainly to a late harvest.” That led to the decrease in grain handling revenue, from $237.8 million to $227.5 million.

However, those numbers point to a 10.1 per cent increase in CPR’s grain revenue per carload, from $2,357 in its 2007 Q3 up to $2,594 in its latest quarterly report.

“Our pricing gains and focused cost containment helped offset declines in bulk volumes,” CPR CEO Fred Green said in a company release Tuesday. “Fuel expenses were a serious headwind, but we saw strong recovery in our operations with progressive improvement as we moved through the quarter.”

“The uncertainty associated with the global economy offsets the positive impact on our financial results of the decrease in the price of crude oil and the weakening of the Canadian dollar against the U.S. dollar,” CPR CFO Kathryn McQuade said in the same release.

CPR’s traffic in sulphur and fertilizers was down 4.6 per cent to 45,400 carloads in its latest Q3, but revenues were up 7.6 per cent at $122.5 million. That made for a 12.7 per cent increase in quarterly revenue per carload in the sulphur and fertilizers sector, at $2,698, compared to the year-earlier Q3.

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