Canadian Pacific Railway in the first quarter quadrupled its profit and improved its operating ratio, a key measure of profitability, as the railroad's management fends off a proxy fight from an activist investor.
The Calgary-based company boosted profit to $142 million, as revenue jumped 18.3 percent year-over-year to nearly $1.4 billion. CP's operating ratio improved to 80.1 percent from 90.6 percent in the same period, while the railroad's operating income increased $165 million to $274 million.
"We have improved operating momentum, we are delivering excellent service and we have a stronger, more resilient rail network," said CEO and President Fred Green.
But Bill Ackman, principal of Pershing Square Capital Management, argues that the railroad isn't improving profitability fast enough. He is pushing a slate of seven directors and trying to replace Green with E. Hunter Harrison, former CEO of rival Canadian National Railway. The proxy vote is slated for May 17 at the annual shareholder meeting.
"Last year, when they put out their results they said, 'horrible winter, that's why we had a 90-plus percent operating ratio'," Ackman told Reuters. "This time, what they don't remind you is that this is one of the best winters in the last 100 years."
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