Canadian Pacific Railway blamed a nine-day strike and costs accrued from a management shakeup for a nearly 20 percent drop in second-quarter profit.
Profit fell to $101 million despite revenue rising 8 percent year-over-year to $1.3 billion on nearly flat volume growth. Intermodal traffic was nearly flat year-over-year, but revenue from the business segment rose 3 percent to about $225 million.
Shipments of grain and forest products fell on a double-digit basis, while industrial and consumer products and automotive volumes experienced double-digit growth. Coal shipments ticked up 1 percent year-over-year, while sulfur and fertilizer volume was flat.
The company’s operating ratio rose 80 basis points to 82.5 percent. Increasing profitability at the least profitable major railroad in North America was the rallying cry for activist investor William Ackman’s shake-up of CP management.
“I look forward to working with a solid team of dedicated railroaders to improve CP’s service offering and drive long-term shareholder value. Canadian Pacific is a strong franchise with positive market opportunities,” said President and CEO E. Hunter Harrison, who is key to Ackman’s drive to boost railroad profitability.
Revenue per intermodal carload, a key measure of pricing, rose 5 percent, while revenue from railcars and intermodal units increased 8 percent. CP’s operating income increased by $7.9 million to $239 million compared to the same period in 2011.