(Bloomberg News circulated the following story by Hugo Miller on April 22.)
TORONTO — Canadian Pacific Railway Ltd., the country’s second-largest railroad, posted a 29 percent drop in first-quarter profit because of rising fuel prices and disruptive snowfall and cut its 2008 earnings outlook again.
Net income fell to C$91 million ($90.3 million), or 59 cents a share, from C$129 million, or 82 cents, a year earlier, the Calgary-based company said today in a statement. That beat analysts’ estimates. Revenue climbed 2.7 percent to C$1.15 billion.
“We continued to face remarkable year-over year increases in both fuel prices and the Canadian dollar,” and record snowfall “affected the entire supply chain,” Chief Executive Officer Fred Green said in the statement.
Today’s reduction in the 2008 earnings forecast is Canadian Pacific’s second this year, after lowering expectations in February when regulators capped charges for grain shipments. The carrier cited a harsh winter, a slump in lumber shipments and a weaker U.S. dollar that makes revenue from the U.S. worth less when converted into Canadian currency.
Excluding foreign exchange, long-term debt losses and other specified items, full-year profit will be C$4.40 to C$4.60, down from an earlier range of C$4.65 to C$4.80. Canadian Pacific kept its full-year revenue-growth target at 4 percent to 6 percent.
Per-share earnings on that basis were 75 cents, beating the 73-cent average of 20 analyst estimates compiled by Bloomberg.
Canadian Pacific yesterday rose C$1.83, or 2.7 percent, to C$71.25 in Toronto Stock Exchange trading. The stock gained 11 percent this year before today.
Forest Products, Autos
Quarterly revenue fell 19 percent for forest-product shipments and 12 percent for deliveries of cars, trucks and auto parts, as the worst U.S. housing slowdown in 25 years prompted consumers to rein in spending.
Canadian Pacific’s U.S. business accounts for a fifth of the carrier’s revenue.
Canadian National Railway Co., the country’s biggest railroad, yesterday reported a decline in profit and pared its 2008 earnings outlook, also citing declines in automotive and forest-product revenue.