(The following article by John D. Boyd appeared on The Journal of Commerce website on May 24, 2010.)
WASHINGTON, D.C. — Canadian Pacific Railway is raising by about $66 million the amount it plans to spend on capital improvements this year, for a new spending program that ranges between $708 million and $756 million.
“The improving economy, our strong balance sheet, and solid earnings and free cash flows have enabled us to expand our capital programs to take advantage of growth and productivity opportunities,” said Kathryn McQuade, CP’s chief financial officer.
CP is Canada’s second-largest railroad, and complements its east-west network across that country with large regional holdings in the U.S. upper Midwest and a bridge line in New York.
Besides approving an increase in capital spending, which includes track maintenance and expansion programs, CP’s board also raised the quarterly dividend paid to shareholders. McQuade said the railroad’s “strong franchise showed resilience through the recession, and this dividend increase continues our trend of dividend growth aligned with earnings growth.”
CP’s earnings jumped 74 percent in the first quarter, amid a general surge in rail earnings compared with the same time last year when freight traffic was shrinking rapidly. However, freight shippers in Canada have also been complaining to authorities about service issues this year.