(Bloomberg News circulated the following article by Rip Watson on July 26.)
CALGARY — Canadian Pacific Railway Ltd., the nation’s second-biggest railroad, said profit in the second quarter rose 47 percent because of rate increases.
Net income increased to C$123.2 million ($100.8 million), or 77 cents a share, from C$83.7 million, or 53 cents, in 2004’s second quarter, the company said in a statement today. Sales climbed 10 percent to C$1.11 billion from C$1 billion. The prices per ton of freight shipped one mile rose 11 percent.
Canadian Pacific’s earnings increase followed a 28 percent rise last week at Canadian National, the country’s No. 1 carrier. Canadian Pacific is boosting rates while spending C$160 million this year to expand track capacity in western Canada and carry as much as 12 percent more freight such as coal. The railway’s shipments fell 2.9 percent, the biggest drop among North American carriers.
“The fluidity across our network is generating greater operating efficiency,” Chief Executive Robert Ritchie said in the statement.
Earnings without the effect of currency-value changes rose to 87 cents a share from 65 cents a share. On that basis, the results topped the 83-cents-a-share average estimate in a survey of analysts by Thomson Financial. Canadian Pacific’s profit margin rose to 24.5 cents per sales dollar from 22 cents before taxes and interest. That result trailed Canadian National’s 38.8 cents per sales dollar, the highest in the industry.
Calgary-based Canadian Pacific’s shares rose 4 cents to C$44.50 yesterday in Toronto Stock Exchange trading. They’ve gained 8.3 percent this year.