(The Canadian Press circulated the following article on April 26.)
TORONTO — Canadian Pacific Railway said its first-quarter profits increased by 38 per cent to $111 million. It also said it can meet its 2006 growth targets despite “headwinds” in some parts of its business.
Earnings for the quarter ended March 31 amounted to 69 cents a diluted share, up from 50 cents on $80.7 million profit a year earlier. Before one-time items, profit totalled 74 cents per share. Analysts forecast earnings of 63 cents per share. Revenue for the quarter increased 10 per cent to $1.11 billion.
CEO Rob Ritchie, who will retire in May, said the railway’s average train speed has increased 17 per cent, yard processing time decreased 32 per cent and car velocity is up 15 per cent over last year.
“The medium-term market demand remains strong, with some obvious short-term headwinds,” Ritchie told analysts.
Four of CP Rail’s seven businesses showed year-over-year improvements in the quarter. Grain shipments led revenue growth at 28 per cent, with volume increasing due to higher exports from Canada and the United States.
Fred Green, who will succeed Ritchie as CEO, said CP will hit its expense-reduction targets for 2006 and revenue is expected to grow 5 to 7 per cent from 2005, as earlier estimated.
But he cautioned that coal and potash are still considered “wild cards” in the short term.