American Railroads Excel
With one noteable exception
Led by Canadian Pacific, North American railroads have improved their already respectable
performance. CP, bouyed by the strong economy both in Canada and south of the border, improved
revenues in the fourth quarter of 1997 by 14% to a record C$668 million and operating expenses
fell by $40 million. The operating ratio (the percentage of revenues that goes into operating the
railway) was 78,4%. Financial turmoil in Asia marrs the outlook for 1998, but a low Canadian dollar,
coupled with a strong economy in Canada and the USA, should offset this.
CP's collegue and competitor Canadian National, improved
revenues by nine per cent in the year ending Dec 31st. Operating expenses rose by five per cent.
CN's operating ratio was 81,5% for the year, and in the last quarter, the operating ratio dipped below
80% for the first time in the railway's history.
"The year 1997 marked a new phase in CN's evolution as a shareholder-owned company," said CEO
Paul Tellier. "The company began to focus successfully on profitable revenue growth, improved
utilization of assets and continued cost containment. This three-pronged strategy will guide CN in
Norfolk Southern's operating
revenue increased 4% in the last quarter of 1997, compared to the
same quarter in 1996. NS considerably outshines the Canadian railways with its record operating ratio
of 70,4% for the fourth quarter. If NS can avoid doing whatever Union Pacific did, performance should
improve after swallowing its half of Conrail.
Which brings us to CSX, where operating
income increased 4% to $1,58 billion.
"We are looking forward to stronger performance in 1998, with growth and higher returns at all our
businesses as we prepare to integrate Conrail and improve our competitive position in our core
business,'' said chairman and CEO John W. Snow.
Burlington Northern Santa Fé, the merged company, increased
operating revenue by 6% in 1997, to $1,9 billion. BNSF's operating ratio improved to 75.9 per cent
for the fourth quarter 1997.
And Union Pacific. We've written quite a lot about UP in this space. UP had an operating loss of $57 million in the fourth quarter of 1997, compared to operating income of $470 million for the same period in 1996. The operating ratio was 102.5 in the fourth quarter,
compared to 81.6 in the fourth quarter of 1996.