(Reuters circulated the following on April 24.)
TORONTO — Canadian Pacific Railway Ltd. posted an 18 percent rise in first-quarter earnings on Tuesday, despite harsh winter weather that disrupted operations in Western Canada.
CP plans to buy back up to 15.5 million of its outstanding common shares for cancellation, representing about 10 percent of the public float.
The company said it had net earnings of C$128.6 million, or 82 Canadian cents per share, in the first three months of 2007. That compares with a profit of C$108.8 million, or 69 Canadian cents per share, in the same quarter a year earlier.
CP officials had warned earlier they expected earnings would be hit by weather conditions that damaged its mainline in British Columbia, and disruptions caused by a strike at larger rival Canadian National Railway (CNR.TO: Quote).
Excluding foreign exchange gains and losses on long-term debt, diluted earnings per share rose 8 percent to 78 Canadian cents from 72 Canadian cents.
Canadian Pacific, which has operations in Canada and the United States, said revenues in the quarter were C$1.09 billion, up from C$1.07 billion a year earlier.
CP said its operating ratio — a transportation industry measure of efficiency — improved to 79.5 percent from 79.6 percent a year ago.
CP reaffirmed its outlook for earnings per share excluding foreign exchange gains and losses on long-term debt and other items, to be in the range of C$4.30 to C$4.45 for 2007.
A reduction in CP’s cash pension funding requirement to about C$100 million, down from a C$150 million estimate given in the fall of 2006, has boosted the company’s free cash outlook to more than C$300 million in 2007, up from C$250 million estimated previously, CP said.
CP expects to grow revenue between 4 percent and 6 percent in 2007. It sees capital investment between C$885 million and C$895 million and free cash, after dividends, is expected to exceed C$300 million in 2007.