CP Railway’s 3rd quarter net income slides 21%
Canadian Pacific Railway raised its outlook for the full year despite seeing its third quarter net income slump 20.6 percent to C$161.7 million ($143.4 million), from C$203.6 million in the same quarter 2005.
The Calgary, Alberta-based railroad said the decline in net income was primarily due to the impact of foreign exchange on long-term debt and a one-time special reduction to an accrual taken in the third quarter last year.
CPR’s third quarter operating income rose 19 percent to C$296.9 million ($263.4 million) from C$249.4 million a year ago.
Freight revenue increased 4 percent to C$1.12 billion ($995.3 million) with gains in all but one of CPR’s seven business groups:
* Grain up 18.1 percent to C$225.3 million ($199.9 million).
* Industrial and consumer products, up 13.2 percent to C$156.7 million ($139 million).
* Sulphur and fertilizers up 9.6 percent to C$118.7 million ($105.3 million).
* Intermodal up 8.3 percent to C$327.2 million ($290.3 million).
* Automotive up 2.5 percent to C$69.3 million ($61.5 million).
* Forest products up 0.1 percent to C$86 million ($76.3 million).
* Coal down 25.2 percent to C$139 million ($123.3 million).
“I am very pleased with our results,” said Fred Green, CPR’s president and chief executive officer. “CPR has delivered growth of 26 percent in normalized diluted earnings per share and an improved operating ratio of 74.2 percent.”
For the year to date, the railway’s net income is up by 59.6 percent to C$650.2 million ($576.9 million), compared to C$407.5 million after nine months last year. Operating income was up 10.2 percent at C$699.2 million ($620.4 million) from C$699.2 million. Freight revenues increased 4.3 percent to C$3.28 billion ($2.90 billion) from C$3.14 billion.
Looking ahead, the company said that based on current trends, it was possible that it will exceed the top end of its current C$3.60 ($3.19) to C$3.85 ($3.42) earnings guidance for the full year by up to C10 cents (9 cents) a share.
