April 18, 2018 / 8:13 PM / 3 months ago

CP Railway's profit tops estimates on higher potash, crude shipments

(Reuters) - Canadian Pacific Railway’s (CP.TO) first-quarter profit topped analysts’ expectations as the railroad operator shipped higher volumes of commodities such as potash and crude oil, offseting the impact of higher expenses.

FILE PHOTO: The Canadian Pacific railyard is pictured in Port Coquitlam, British Columbia February 15, 2015. REUTERS/Ben Nelms

The results come as unionized workers at CP, Canada’s second largest railroad, prepared to strike as early as Saturday after a stalemate in talks with the company over certain demands.

In a call with analysts, CP Chief Executive Keith Creel said he was in “very close contact” with the labor unions.

“We cannot make and will not make a bad short-term deal that jeopardizes our ability to protect the long-term interest and strength of this company, the benefit our customers, employees and the Canadian economy,” Creel added.

CP said that while revenue from grain — among the biggest contributors to overall results — slipped 9 percent, potash revenue and revenue from energy, chemicals and plastics both increased over 10 percent.

CP’s operating ratio — operating costs as a percentage of revenue — rose to 67.5 percent from 62.4 percent a year earlier. A lower ratio indicates higher efficiency.

Net income fell to C$348 million ($275.8 million) from C$431 million a year earlier. Excluding one-time items, CP earned C$2.70 per share, topping analysts’ average estimate by 2 Canadian cents, according to Thomson Reuters I/B/E/S.

The Calgary-based company’s total revenue rose nearly 4 percent to C$1.66 billion.

($1 = 1.2620 Canadian dollars)

Reporting by Ahmed Farhatha in Bengaluru and Allison Lampert in Montreal; Editing by Arun Koyyur and Sai Sachin Ravikumar

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