(CBC News published the following report on its website on July 24.)
CALGARY — Canadian Pacific Railway said second-quarter profit was slashed by a $150 million (after tax) restructuring charge.
The charge, $228 million before tax, covers the writedown of the value of a U.S. subsidiary and 820 job cuts – 370 this year, 330 in next year and 120 in 2005.
While operating profit before the charge was down 13 per cent, final profit for the three months ended June 30 fell 83 per cent to $28.9 million (18 cents a share) from $168.7 million ($1.06 a share) a year earlier.
Revenue was $914.1 million, compared with $922.5 million.
CP said the charge included $105.5 million (pre-tax) to cover 820 staff reductions and future rental payments for space no longer needed, and a $116.1 (pre-tax) million writedown of CPR’s northeastern U.S. subsidiary, Delaware and Hudson Railway Co. Inc., as well as several smaller items.
The gain in the Canadian dollar cost the railway $9 million, because there was a $31 million gain on expenses incurred in U.S. dollars and a reduction of $40 million in U.S. dollar-denominated revenues.
Rob Ritchie, president and CEO, was optimistic about the outlook for the rest of the year.
“We anticipate a rebound in bulk commodities later this year,” he said.
CP is preparing for the increased business by working on track maintenance and improving train productivity by using standardized double-stack cars and by expanding its fleet of big locomotives that can pull longer trains.
CP stock rose 60 cents to $32.60.