CP Railway profit rises on higher freight revenue

Wed Apr 24, 2013 3:28pm EDT
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(Reuters) - Canadian Pacific Railway Ltd (CP.TO: Quote) reported a 53 percent increase in first-quarter profit as freight revenue rose and the company improved its operating efficiency.

Canada's No. 2 rail carrier said net income rose to C$217 million ($212 million), or C$1.24 per share, from C$142 million, or 82 Canadian cents per share, a year earlier.

Revenue rose 9 percent to C$1.50 billion.

Calgary-based CP said its operating ratio, which measures productivity by tallying how much revenue is needed to maintain operations -- the lower the percentage, the better -- improved to 75.8 percent from 80.1 percent a year earlier.

CP is targeting a mid-60 percent operating ratio by 2016.

The company's bigger Canadian rival, Canadian National Railway (CNR.TO: Quote), said on Tuesday it sees a sustainable mid- to low-60s in terms of operating ratio.

Canadian National, Canada's largest rail operator, reported lower quarterly profit this week as it took a big winter weather hit.

Shares of Calgary-based CP closed at C$126.23 on Tuesday on the Toronto Stock Exchange.

($1 = 1.0260 Canadian dollars)

(Reporting by Susan Taylor in Toronto and Bhaswati Mukhopadhyay in Bangalore; Editing by Supriya Kurane)

A Canadian Pacific Railway locomotive sits at the Obico Intermodal Terminal in Toronto, May 23, 2012. REUTERS/Mike Cassese