(Reuters circulated the following on June 14.)
VANCOUVER, B.C. — A strike, fuel costs and weather woes in western Canada may hit Canadian Pacific Railway’s second quarter results, its chief financial officer said on Thursday.
But Mike Lambert told an investment conference that the railway’s operations will rebound in the second half of the year, and it still expects to meet its full-year 2007 earnings guidance of between C$4.30 and C$4.45 per share.
The rapid melting of a higher-than-normal snowpack in the mountains of British Columbia has caused washouts and mudslides on Canadian Pacific’s rail lines through the western Canadian province in recent weeks.
“While we’re meeting our customer commitments, the cost of our contingency plan, a 26-day maintenance of way (employees) strike, and further expansion of fuel margins may cost us up to a nickel in EPS in Q2,” Lambert told the Merrill Lynch transportation conference in New York.
“We’re not changing our annual forecast,” he added.
The railroad reached a tentative contract deal last week with the union representing the 3,200 track repair crews in Canada, who have returned to work pending a ratification vote.
CP warned ahead of its first quarter results because of poor weather in British Columbia, and earnings ended up 10 percent below last year’s results.