CPR sees higher profit

TAVIA GRANT

Tuesday, April 24, 2007

Canadian Pacific Railway Ltd. said Tuesday it expects profit to climb between 9 per cent and 13 per cent this year on lower costs, higher yields and a more diversified portfolio.

The railway sees earnings of between $4.30 and $4.45 a share in 2007 — excluding foreign exchange gains, losses on long-term debt and other items, from $3.95 a share last year.

“Our diverse commodity portfolio, a strong yield program and continued vigilance around cost containment will drive our projected earnings-per-share growth,” said Mike Lambert, chief financial officer, in a release.

The Calgary-based company said first-quarter profit rose 18 per cent to $129-million or 82 cents a share. Freight revenue inched 2.2 per cent higher while operating expenses were little changed.

Earnings climbed “in the face of extremely difficult, weather-related operating conditions that challenged the entire transportation chain,” said Fred Green, CP's president and chief executive.

“With the recent return to more normal operating conditions, we expect to move freight volumes with increasing efficiency and improved service levels through the balance of the year.”

The first-quarter results come after rival Canadian National Railway Co. reported a 10-per-cent drop in first-quarter profit, amid a work stoppage and harsh winter conditions.

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