Canadian Pacific Q2 Profit Up 47%, Results Beat View

(RTTNews) - Canada's second-largest railroad operator Canadian Pacific Railway Ltd. (CP, CP.TO) on Thursday reported a 47 percent increase in profit for the second quarter from last year, reflecting double-digit growth in freight revenue on higher grain shipments. Both revenue and earnings per share for the quarter beat analysts' expectations.

Hunter Harrison, chief executive officer of Canadian Pacific said, "The team has made great strides in my two years at CP and they continue to demonstrate resiliency by delivering these results despite continued operational challenges in the U.S. Midwest after a devastating winter."

The Calgary, Canada-based company's net income for the second quarter was C$371 million or C$2.11 per share, up from C$252 million or C$1.43 per share in the prior-year quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of C$2.10 per share for the quarter. Analysts' estimates typically exclude one-time items.

Canadian Pacific's revenues for the quarter grew 12 percent to C$1.68 billion from C$1.50 billion in the same quarter last year and beat analysts' consensus revenue estimate of C$1.65 billion.

Revenues from freight services rose 13 percent from the prior-year period to C$1.64 billion, while other revenues were flat with last year at C$39 million.

Canadian grain freight revenues grew 32 percent from last year to C$252 million, while U.S. grain freight revenues increased 26 percent to C$115 million.

Canadian Pacific's total revenue ton-miles or RTMs for the quarter grew 7 percent from the year-ago period to 38.43 billion, while total freight revenue per RTM increased 5 percent from last year to 4.27 cents.

Total carloads for the quarter increased 3 percent from the year-ago quarter to 689,000, while total freight revenue per carload grew 9 percent to $2,383.

Operating income for the quarter surged 40 percent from the year-ago period to C$587 million, while total operating expenses rose 2 percent to C$1.09 billion. Operating ratio for the quarter improved 680 basis points from last year to 65.1 percent.

Looking ahead, Harrison said, "The future is very promising for the railroad as we transition towards leveraging our lower cost structure and improved service."

CP closed Wednesday's trading on the NYSE at $183.91, up $1.22 or 0.67 percent on a volume of 689,087 shares.

On the Toronto stock exchange, CP.TO closed Wednesday's trading at C$197.83, up C$1.72 on a volume of 315,502 shares.