The results were largely in line with analysts' estimates, although that range had been wide as the market had a hard time estimating the long-term impact of the widespread flooding, said Edward Jones analyst Brian Yarbrough.
CP, Canada's second-biggest railroad, had a tough first half after bad weather, including heavy snowstorms and flooding in Western Canada and the United States, snarled traffic on its tracks, leading to delays for customers across its Canadian and U.S. network.
"The issue with CP is that right now they are the most inefficient railroad. They have the highest level of expenses compared to the rest of rails," Yarbrough said.
"There's this huge opportunity to improve that," he said.
For the third quarter, CP reported net income of C$186.8 million ($185 million), or C$1.10 a share, down from C$197.3 million, or C$1.17 a share, a year ago.
Revenue rose 4 percent to C$1.34 billion.
Analysts, on average, had expected CP to report earnings of C$1.11 a share on revenue of C$1.34 billion.
The latest earnings included 4 Canadian cents per share in costs related to early redemption of its 2013 notes, the company said.
CP said its operating ratio - an important measure of a railway's productivity - rose to 75.8 percent in the quarter, from 73.7 percent in the year-ago period.
The higher the ratio, which measures operating costs as a percentage of revenue, the less efficient the railway.
Already released data shows CP's carloads dropped 2 percent in the quarter, with intermodal traffic down 10 percent, possibly due to a loss of market share to larger rival Canadian National Railway Co .
Intermodal traffic involves the transport by more than one mode, in this case rail and truck, and often involves of consumer goods.
"We currently see strength in our bulk franchise, but remain vigilant in monitoring economic signals from Asia," CP Chief Executive Fred Green said in a statement.
Bulk goods include grains, potash and metallurgical coal, much of which is exported to Asia. (Reuters)
