A six per cent jump in grain handling revenue helped offset dips in forestry and automotive freight that bit into Canadian Pacific Railway’s (CPR) first-quarter net income.
The railway on Tuesday posted overall net income of $90.8 million on $1.12 billion in revenue during its Q1 ending March 31, down from $128.6 million on $1.09 billion in the year-earlier period.
Grain traffic accounted for $232.4 million of that revenue during the quarter, an increase of 5.8 per cent over the same quarter in 2007. Grain carloads hauled were up 3.4 per cent at 92,300, for total revenue per grain carload of $2,518, up 2.4 per cent.
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The railway’s overall revenue per carload, across all sectors, was up 0.9 per cent at $1,736.
Fuel price hikes and the rising loonie were among “substantial headwinds” in the quarter, CEO Fred Green said in a release. “At the same time, we had a
difficult winter with prolonged cold spells and record snowfall which affected
the entire supply chain and resulted in very tough operating conditions
throughout the central and eastern parts of our network.”
Looking ahead, Green said bulk freight demand remains strong but intermodal business is expected to take some impact, “further deterioration” is expected in the merchandise sector and high fuel prices are expected to continue, leading CPR to cut its earnings guidance for the fiscal year.
CPR said Tuesday that it still expects to grow total revenue by four to six per cent in 2008, but operating expenses are expected to rise six to eight
per cent, revised upward from previous estimates of three to five per cent, due mainly to higher fuel costs.
