Canadian Pacific Profit Falls 67 Percent to $36 Million

Canadian Pacific Railway saw its first quarter earnings plunge 67 percent from a year earlier to nearly $36 million (U.S. dollars), reflecting the effects of severe winter weather on its system as it had warned in March.


Revenue for the period of $1.2 billion was only 0.3 percent below the 2010 quarter, but costs were up 10 percent both from spiking fuel prices and CP's need to purchase more services outside its own network.


The network strain showed up in key performance measures, as average train speed shrank 13.5 percent to 19.8 mph and railcar miles traveled per day fell 7.2 percent. That tied up more cars and locomotives, adding to costs. The railroad also posted a 57 percent higher average number of train accidents.


Fred Green, CP's president and CEO, said the last few months saw "an extremely difficult winter, with weather-related outages significantly constraining our capacity and our service to our customers."


However, he said, "We are intensely focused on improving network velocity and service reliability. Demand is strong and we have additional resources coming online to meet our customers' growth."


The carrier held revenue steady despite a 3.1 percent contraction in traffic because it bumped up revenue assessed per shipment 2.9 percent. That ranged from a 21 percent spike in per-car receipts for coal loadings to 1.3 percent for forest products. Intermodal average charges rose 2.1 percent but CP's per-car revenue for grain and automotive shipments declined.


CP ended the quarter with 15,143 employees across its lines in Canada and the U.S., up 613 workers or 4.2 percent from the same point last year.
(Source:http://www.joc.com)