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CP Rail Q2 profit up 46pc to US$380 million, revenues rise 13pc
THE Canadian Pacific Railway (CP) has posted a 46 per cent second quarter net profit increase to C$480 million, (US$380 million) drawn on revenues of $1.6 billion, up 13 per cent.
The company also reported an eight per cent increase in shipping volumes in the second quarter, but warned growth could stall if the current drought hurt wheat crops in Canada and the US.
Gains were driven by the Calgary-based railway by higher volumes in bulk products such as coal, potash and grain.
CEO Keith Creel credited efficiency gains and cost control for the results, but added on a conference call it's too early to adjust CP Rail's four-year guidance.
"It's prudent to wait until there's more clarity on some of these key items before we revisit our outlook, which we will likely do at the end of the third quarter," he said.
Chief marketing officer John Brooks said the company's concerns mainly involve grain volumes from North Dakota and southern Alberta and Saskatchewan.
Canadian Pacific said its operating ratio - a measure of efficiency that balances revenue with expenses - improved by 330 basis points to 58.7 per cent compared with the second quarter of 2016.
Edward Jones analyst Daniel Sherman said he was impressed with CP Rail's volume growth and its focus on marketing but the reluctance to change guidance is concerning.
The company reported that its workforce rose about two per cent to 12,200 staff during the quarter.
The company also reported an eight per cent increase in shipping volumes in the second quarter, but warned growth could stall if the current drought hurt wheat crops in Canada and the US.
Gains were driven by the Calgary-based railway by higher volumes in bulk products such as coal, potash and grain.
CEO Keith Creel credited efficiency gains and cost control for the results, but added on a conference call it's too early to adjust CP Rail's four-year guidance.
"It's prudent to wait until there's more clarity on some of these key items before we revisit our outlook, which we will likely do at the end of the third quarter," he said.
Chief marketing officer John Brooks said the company's concerns mainly involve grain volumes from North Dakota and southern Alberta and Saskatchewan.
Canadian Pacific said its operating ratio - a measure of efficiency that balances revenue with expenses - improved by 330 basis points to 58.7 per cent compared with the second quarter of 2016.
Edward Jones analyst Daniel Sherman said he was impressed with CP Rail's volume growth and its focus on marketing but the reluctance to change guidance is concerning.
The company reported that its workforce rose about two per cent to 12,200 staff during the quarter.
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