(Reuters circulated the following article on April 25.)
VANCOUVER, British Columbia — Higher revenues and faster trains on its 14,000-mile (22,400 km) network helped Canadian Pacific Railway
The carrier, which is the latest North American railway to report stronger profits, said it expects revenue growth in the range of 5 percent to 8 percent for the year, although shipping volumes for Canadian potash and coal remain “wild cards.”
“We think there continues to be some pretty strong price opportunities in the market,” chief operating officer Fred Green, who will take over as chief executive next month, told analysts in a conference call.
The company earned a net profit of C$111 million ($97 million), or 69 Canadian cents per diluted share, in the quarter ended March 31. That was up from C$80.7 million, or 50 Canadian cents a share, a year earlier.
Analysts surveyed by Reuters Estimates had been looking for earnings of between 58.5 Canadian cents and 75 Canadian cents, with the mean estimate calculated at 63.7 Canadian cents.
Quarterly freight revenue swelled to C$1.1 billion from C$992 million a year earlier. The company had C$43 in additional “other” income, such as one-time land sales, up from C$21.5 billion in the year-ago quarter.
The company said a 6 percent rise in operating expenses to C$881 million was spurred largely by fuel costs — which were mostly recovered through its fuel-surcharge program — and increased benefits and stock-based compensation costs.
CP Rail had been assuming oil prices would average $58 per barrel for the year, but that has been revised to $66.
The company said its operating ratio, a railroad industry measure of efficiency, was 79.4 percent, a 3-percentage-point improvement from the year-earlier quarter.
Train speeds were up 17 percent in the quarter over last year, which the company credited largely to last year’s expansion of track capacity on its main line to Vancouver through the mountains of Western Canada.
Total train volumes through the expanded track areas has not met original expectations, but the company said it expects that will change as export potash and coal shipments rebound.
The Calgary, Alberta-headquartered railway overhauled its management operations this year to make them less centralized, a move that eliminated about 400 administrative jobs.
CP Rail maintained its outlook for diluted earnings per share in 2006 at a range of C$3.60 to C$3.85, excluding foreign exchange gains and losses on long-term debt and other specified items.