John D. Boyd | Jul 27, 2011 12:55PM EDT
Canadian Pacific Railway blamed severe flood disruptions for shrinking its second-quarter profit 23 percent to about $136 million (C$128 million), by curbing revenue growth and adding costs.
Revenue increased just 2.5 percent, well behind the pace of other major carriers, to $1.34 billion (C$1.26 billion). Profit declined to 10.1 percent of receipts in the April-June period, from a 13.5 percent profit margin a year earlier.
Fred Green, president and CEO, said “widespread and prolonged flooding along our right of way” hampered CP operations throughout the quarter. About 90 separate track outages caused numerous detours and rerouting of freight traffic, he said, and CP “incurred significantly higher operating costs to ensure delivery of our customers' shipments.”
But Green said most of those effects are over with, as “repairs are now complete and service levels are returning to normal."
CP’s shipment count declined 4.3 percent across all business lines, including an 8.4 percent drop in intermodal volume and a 14.4 percent fall in coal.
However, in a solid pricing environment that other railroads have already pointed to, CP’s revenue per unit rose 7.3 percent as intermodal yields gained and coal per-unit receipts jumped 24.4 percent.
The company had 16,439 workers at the end of the period, counting both its Canadian and U.S. rail properties, up 2.9 percent from the end of June 2010.
-- Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter www.twitter.com/jboydjoc
