(Bloomberg News distributed the following article by Rip Watson on January 27.)
CALGARY — Canadian Pacific Railway Ltd., the country’s No. 2 railroad, said net income fell 26 percent in the fourth quarter as environmental cleanup costs reduced profit.
Net income including the effect of currency exchange rates dropped to C$129 million ($104.1 million), or 81 cents a share, from C$174 million, or C$1.09, the company said. Profit excluding the currency effect was C$116 million, or 73 cents a share, up from C$114 million or 71 cents. Cleaning up a Minnesota property cut profit by C$55 million.
Revenue rose 6.1 percent to C$1.02 billion as shipments climbed 2.5 percent. Agreements to share tracks in Vancouver and the eastern U.S. helped increase capacity and speed deliveries. The cargo increase included 13 percent more chemicals, according to the Association of American Railroads trade group.
“We began driving our productivity and efficiency indicators in the right direction at the same time as freight volume took off,” said Chief Executive Robert Ritchie in the statement. “As fluidity continues to increase, productivity will increase.”
Fluctuations in the Canadian dollar affect Canadian Pacific’s debt payments, most of which are made in U.S. dollars. A rise in the Canadian dollar lowers the Calgary-based company’s interest payments and boosts its earnings.
Currency effects added C$57.2 million to fourth-quarter profit, compared with C$44.3 million in the prior year period.
The railroad’s shares fell 70 cents to C$40.80 yesterday in trading on the Toronto Stock Exchange. They’ve risen 15 percent in the past 12 months.
Canadian National Railway Co. is the nation’s biggest railroad.