UPDATE 2-CP Rail sees more growth as 2nd quarter tops forecasts
(Adds analyst comment, conference call details, market reaction)
By Solarina Ho
TORONTO, July 17 (Reuters) - Canadian Pacific Railway Ltd reported stronger-than-expected results on Thursday, and said rising freight volumes and prices should push already record results to new highs later this year.
The shares of the Calgary-based railway, which have risen some 20 percent since its last quarterly report, surged as much as 4.7 percent on the news.
"I could more characterize the quarter as record after record after record," Chief Executive Officer Hunter Harrison told analysts. "Looking at the balance of 2014, we see strong fundamentals on the demand side."
Growth in the burgeoning crude-by-rail business could potentially ramp up to a train a day by the fourth quarter, executives said.
The results came even as North American railroads grappled with the fall-out from one of the harshest winters in decades. CP said rail congestion around Chicago and delays along the Minneapolis/St. Paul corridor were still an issue.
CP and larger rival Canadian National Railway were also under significant pressure during the first half of the year to clear the backlog from a record grain harvest while dealing with service disruptions caused by the winter weather.
Despite these challenges, Calgary-based CP said its operating ratio improved by 680 basis points to 65.1 percent. Operating ratio is a key measure of railroad efficiency. The lower the number the better. Continued...