Cargo Business Newswire

Wednesday, July 22, 2015

CP Railway lowers 2015 fiscal outlook

Canadian Pacific Railway cut its forecast for full-year revenue and earnings-per-share growth while it struggles to control costs amid a decline in demand for commodities shipments.

The rail sector has suffered from a drop in coal, oil and grain, reversing last year’s surge. At Canadian Pacific, crude revenue dropped 29 percent in the second quarter, while automotive revenue fell 13 percent.

CP differed from other railroads, including Canadian National Railway Co. and CSX Corp., which have cut jobs to boost earnings that beat estimates in recent days.

Revenue will probably rise 2 percent to 3 percent in

2015, less than a January forecast of 7 percent to 8 percent growth, Canadian Pacific said in a statement. Annual adjusted earnings per share will be $7.72 to $8.02, less than the $8.20 expected by an earlier forecast for 25 percent profit growth this year.

"While the downward guidance revision may be disappointing to some, a 20 percent earnings growth rate this year would still be a very solid achievement in the context of a challenging volume environment," Cameron Doerksen, an analyst at National Bank Financial in Montreal, said in a note.

For more of the Bloomberg story: www.bloomberg.com