Canadian Pacific Railway Limited
), Canada's second largest railway carrier, reported adjusted
earnings per share of C$1.44 (approximately $1.31) in the first
quarter, missing the Zacks Consensus Estimate of $1.38. However,
the results improved 16.1% from C$1.24 per share (approximately
$1.21) in the year-ago quarter. Shareholders reacted positively
to the year-over-year earnings growth as the stock gained 5.25%
on Tuesday trade on NYSE.
Quarterly revenues nudged up 0.9% year over year to C$1,509
million (approximately $1,369.4 million) but missed the Zacks
Consensus Estimate of $1,390 million. The company delivered a
decent performance despite the severe winter that affected the
Carloads (volume) decreased 6.2% year over year, while revenue
ton-miles (RTMs), which measure the relative weight and distance
of rail freight transported by Canadian Pacific, grew 7.7% year
Operating Income and Expenses
Operating income improved 16.9% year over year to C$423
million (approximately $383.9 million). Operating expenses
decreased 4.1% year over year to C$1,086 million (approximately
$985.5 million). Operating ratio (defined as operating expenses
as a percentage of revenues) improved 380 basis points year over
year to 72.0% on continued focus on maintaining asset
efficiencies, safety measures and productivity increase.
Canadian Pacific exited the first quarter with cash and cash
equivalents of C$279 million (approximately $253.2 million), down
from C$476 million (approximately $462 million) at the end of
2013. Long-term debt increased to C$4.774 billion (approximately
$4.332 billion) from C$4.687 billion (approximately $4.552
billion) at year-end 2013.
The company paid C$61.0 million ($55.4 million) in dividend
during the reported quarter.
Canadian Pacific repurchased 567,750 shares worth C$87.0
million ($78.95 million) in the first three months of 2014.
Canadian Pacific remains focused on volume expansion,
operational efficiency, pricing revision and network capability
upgrade. We believe that strength in the Merchandize segment and
Canadian Coal exports will lead to higher revenues and earnings
in the coming quarters. The company is expected to benefit from
its coal agreement with
Teck Resources Ltd
) and draw synergies from its agreements with Canpotex and
However, a weak domestic coal business, commodity risks
related to the purchase of diesel fuel and competition from other
Canadian and U.S. companies are headwinds to the company's
Canadian Pacific currently has a Zacks Rank #3 (Hold).
While another railroad company
) reported a year-over-year drop in first quarter earnings,
Kansas City Southern
) posted significant earnings growth.
CDN PAC RLWY (CP): Free Stock Analysis Report
CSX CORP (CSX): Free Stock Analysis Report
KANSAS CITY SOU (KSU): Free Stock Analysis
TECK RESOURCES (TCK): Free Stock Analysis
To read this article on Zacks.com click here.