Railroad operator CP Rail's profit tops estimates
By Allison Lampert
MONTREAL (Reuters) - Canadian Pacific Railway Ltd reported a higher-than-expected quarterly profit as it earned more from shipments of commodities such as grain and coal, and the company expressed optimism that demand was improving.
The results are the first under Chief Executive Keith Creel, who officially took the reins in the middle of the quarter from veteran railroad executive Hunter Harrison.
CP is expecting mid-single-digit RTM (revenue ton mile) growth in the second quarter, supported by shipments of potash and grain, as Canada's No. 2 railroad pushes more broadly to attract new customers and boost profitable growth.
"You're going to see top-line growth in this company," Creel told analysts on Wednesday.
Creel said he would hold open meetings with employees to improve labor relations, but any efforts would not come at the expense of efficiency gains won by Harrison, who boosted CP's profitability and share price by cutting costs, including workers.
"Some feathers have been ruffled," Creel said of relations with employees during the last four years under Harrison. "So part of my focus has been to reconnect with employees and also to reconnect ... with our labor unions to ensure that the things we maybe didn't get right in the past, that we can get right as we go forward."
North American railroad operators have cut costs amid pressure from volatile commodity prices that have crimped freight volumes.
Creel also suggested that there could be opportunities for some type of collaboration "from an operational standpoint" with U.S. railroad CSX Corp , which is now headed by Harrison, to improve service and hand off cargo around the congested Chicago hub. Continued...