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TORONTO (Reuters) - Canadian Pacific RailwayTO> will become North America's most efficient carrier in the next two quarters, Chief Executive Hunter Harrison predicted in an interview on Thursday.
Harrison, who took control of CP two years ago after a bruising proxy battle, introduced a string of initiatives to cut costs, "sweat" company assets and improve service that has already transformed the former industry laggard and more than doubled its share price.
"We're going to become, in the next two quarters I think, clearly, the low-cost carrier," Harrison said in a phone interview following CP's annual general meeting in Calgary. "Maybe when we get into (a) low 60s (operating ratio) there will be a little shift ... toward a growth mode."
The lower the operating ratio, which measures total operating expenses as a percentage of revenue, the better. In 2011, CP scraped the bottom of the efficiency barrel, with an operating ratio of 81 percent.
In its most recent quarter, despite fierce winter weather that clipped profits, its operating ratio still improved 380 basis points to 72 percent.
Reporting by Solarina Ho and Susan Taylor; Editing by Jeffrey Hodgson