(The Canadian Press) CALGARY - Canadian Pacific Railway Ltd. (
TSX: T.CP) more than doubled its second-quarter profit, as revenue increased 10 per cent and operating efficiency improved dramatically to a company record.
CP reported it had $252 million in net income, while on a per-share basis its profit grew by 138 per cent to $1.43.
Still, CP missed analyst estimates by six cents per share. The consensus had been for Canada's second-largest railway to produce $1.49 per share of earnings.
"The second quarter was a significant test for our employees who worked tirelessly during extensive network outages, including more than 40 washouts over a four-day period of historic flooding in Calgary and southern Alberta," said chief executive Hunter Harrison, noting that network interruptions during the quarter impacted revenue growth by about $25 million or two per cent.
"Moving forward, CP is well positioned to continue to build upon its strong first half and deliver record financial and operating results for 2013."
CP's operating ratio — a key measure of how efficiently railways operate —improved to 71.9 per cent in the second quarter, an all-time record for CP.
Its revenue increased to nearly $1.5 billion, up from $1.37 billion a year before when net income was $103 million or 60 cents per share.
The quarter marks about one year of a new management regime, brought in after shareholders moved to oust the former CEO and shake up the board of directors.
Harrison — a former chief executive of rival Canadian National Railways — was brought in last year because of his reputation as a hands-on executive with a record of turning CN into North America's most efficient major rail carrier.
"Hunter Harrison has actually delivered,'' said Chris King, portfolio manager at Morgan, Meighen and Assoc. "For him to move it down to that level, man that tells you he is the god of railways.''