Canadian Railroads > CP 2017 Q1 Operating Ratio improves only because Hunter left

CP reported its First Quarter results for 2017.
Revenue was up 1 percent compared to 2016 Q1.
Diluted Earnings per Share were down 17 percent.

The Operating Ratio for the first quarter was 58.1, compared with 58.9 for the first quarter in 2016.
However, this operating ratio included $ 51 million recovered by the early departure of Hunter Harrison.

Without this one time gain, the operating ratio would have increased to 61.3.

http://investor.cpr.ca/news/press-release-details/2017/CP-reports-first-quarter-diluted-EPS-of-293-and-adjusted-diluted-EPS-of-250/default.aspx

Q2 will look especially bad then as things adjust to where they should've been the last 5 years..

Fun and games with metrics.

Revenue up 1 percent.

Operating ratio down 8 tenths of a percent.

Therefore, earnings will be up. Nope. Actually, earnings down 17 percent.

Amazing.

Best regards,

Rob L.

Relying on a few numbers alone without some operational overview is a dangerous way to rate a company's performance and investment worth. Sometimes it is creative accounting, sometimes just accentuating the positive pieces.

Hunter has been gone from CN long enough that his effect on the financial bottom line should be readable in past quarterly results.

His deferred maintenance came back to haunt CN, but other changes he made were positive.

In the end, he seems to have a simple function, to sweat the assets of a corporation to inflate the share values for a short period for his buddies on Wall and Bay Streets. When the assets have been sweated, he moves on.

Several books have been written about CN finances both as a Government and later a shareholder corporation. I'm sure someone is already compiling a financial history of CN in the post privatization era.

In time, a similar CP history will be written.

That is when we will know whether Hunter was a hero or a villain as a "Captain of Industry".