Canadian Pacific Railway Ltd reported higher third-quarter earnings and revenue as its operating ratio, a key efficiency measure, set a new record. On a call with analysts and investors, CP noted that stock-based compensation had weighed on earnings. "In general, we believe these results are largely in line with our forecast. We suspect the consensus estimates did not fully reflect the headwind from elevated stock-based compensation," said BMO Capital Markets analyst Fadi Chamoun in a note to clients. The railway's operating ratio improved 310 basis points to 62.8 percent. The ratio expresses operating expenses as a percentage of revenue, so lower numbers are better. When Chief Executive Hunter Harrison took over CP in 2012 he vowed to bring the ratio down to 65 percent by mid-2016, but it actually hit 65.1 percent in the second quarter of this year. Net income rose to C$400 million ($356 million), or C$2.31 a share, from C$324 million, or C$1.84, a year earlier. Revenue rose 9 percent to C$1.67 billion. Analysts, on average, had expected earnings of C$2.39 on revenue of C$1.7 billion, according to Thomson Reuters I/B/E/S. (Reuters)