Canadian Pacific Railway said Friday it had a profit of $142 million in the first quarter of 2012, more than triple the $34 million it earned in the same 2011 period.
Revenue was $1.38 billion in the first quarter of the current year, 18 percent more than in the same 2011 period.
The company said freight revenue was up in all segments of its business, except sulfur and fertilizers which were down 2 percent to $126 million.
The other segments all had increases in freight revenues, including grain (up 24 percent to $288 million), coal (29 percent to $137 million), industrial and consumer products (29 percent to $298 million), automotive (31 percent to $105 million), forest products (11 percent to $50 million), and intermodal (8 percent to $336 million).
Fred Green, president and chief executive officer, said “looking ahead, we are confident we can continue to deliver improvements in our operating metrics and financial performance and further growth in shareholder value.”
The current leadership of the company is in a proxy fight with U.S. investor William A. Ackman of Pershing Square Capital.
Ackman released a letter Monday complaining CP’s “operating ratio has deteriorated while the operating ratio of the other Class I railways has improved materially. CP’s negative 18 percent total return to shareholders during CEO Fred Green’s tenure reflects its position as the worst managed and poorest performing Class I railway,” he alleged.
“The cost to shareholders of CP’s poor board oversight and mismanagement has been enormous. If you invested $10,000 in Canadian Pacific when Mr. Green became CEO, you would have lost $1,800 and be left with only $8,200 (including dividends) as of the day prior to Pershing Square’s investment in CP,” he added. “Alternatively, if you invested $10,000 in a portfolio of the other Class I railways over the same period, you would have $15,900, nearly twice as much.”
Ackman said “Green recently suggested that the 65 percent appreciation of CP’s shares since Pershing Square began accumulating stock in the company reflects confidence in management and the incumbent board. In fact, this appreciation reflects the increased probability – estimated by the top-ranked railroad industry analyst, JP Morgan’s Tom Wadewitz, at 90 percent – that the current board will be restructured and Mr. Green.”
CP shareholders will hold their annual meeting on May 17 and Ackman said it will be “a referendum on the incumbent board’s performance and an opportunity for shareholders to set CP on track to a better future,” asking them to vote for the Pershing Square slate. – Chris Dupin
Canadian Pacific’s Q1 profit triples
