Canadian Pacific Railway sees lower-than-expected profits

THE Canadian Pacific Railway (CP) has issued a first quarter 2011 earnings warning that profits are expected to be lower due to the impact across its entire supply chain of a severe and long winter, as well as a "lag" in fuel recovery.


"Since the New Year, multiple severe weather events have caused significant disruptions to train operations across our network. Slower train speeds have reduced productivity and asset velocity thereby constraining network capacity and limiting our ability to meet market demands," said Fred Green, president and chief executive officer.


"The impact of avalanche disruptions are just one factor that increased fivefold this year in our busiest corridor through the mountains causing very inefficient stop-start operations," he said.


"We have been increasing resources to meet strong demand and improve service reliability," Mr Green added. "With moderating weather CP is seeing fluidity return to the network and our operating metrics are showing improvement. Our two- to four-year target of delivering a low 70s operating ratio remains unchanged."
(Source:http://www.schednet.com)