(The following story by Grant Surridge appeared on the Financial Post website on January 29.)
OTTAWA — Canadian Pacific Railway Ltd. said on Tuesday its fourth quarter profit more than doubled to $342-million ($2.21 a share) compared with $146-million a year ago (92 cents), mainly due to lower future income tax rates.
For 2007 as a whole, the Calgary-based company’s net income climbed 19% to $946-million ($6.08) compared with $796-million ($5.02) in 2006. This rise was fuelled by an increase in operating income and foreign exchange gains on long-term debt.
CP recorded a full-year future tax benefit of $163-million (of which $146-million came in the fourth quarter) compared with a benefit of $176 million in 2006, thanks to lower income taxes.
Quarterly freight revenue fell 1% to $1.14-billion, as the strong Canadian dollar eroded the top line.
“Even with the impact of foreign exchange, we had revenue growth in some sectors, including industrial and consumer products, intermodal and automotive,” stated chief executive Fred Green.
He also said the company suffered at the hands of severe weather in December that shut down operations for extended periods.
Last year, the company took a $21-million charge on about $144-million in holdings of frozen asset-backed commercial paper. As of the end of 2007, the company said there had been no further change in the estimated fair value of these investments.