CP reopens flooded railway line in North Dakota

Wed Jul 13, 2011 3:10pm EDT
 
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VANCOUVER (Reuters) - Canadian Pacific Railway Ltd has reopened its flooded mainline track running from southern Saskatchewan through North Dakota, five days earlier than it expected, a CP spokesman said on Wednesday.

The track around the city of Minot in north-central North Dakota, was put back in service around midnight on Monday, Ed Greenberg said, and the first train ran through the area "within minutes".

The line linking Western Canada with the U.S. Midwest had been closed since June 20 when the rain-swollen Souris River began to burst its banks. Last week CP, Canada's second biggest railway, said the track could be shut until around July 17.

Greenberg had no estimate available on the cost of the closure but said there was "an expense associated with rerouting and we incurred more miles".

Analysts have cut their earnings estimates for CP's second-quarter in recent weeks because of this and other line closures due to bad weather. CP is scheduled to release its financial results on July 27.

There is "considerable uncertainty" surrounding CP's earnings as the railway experienced service disruption "to a much greater extent that the rest of the Class 1 railroads", RBC Capital Markets analyst Walter Spracklin said in a note to clients this week.

Analysts, on average, expect CP to report earnings of 78 Canadian cents a share for the three months to June 30, according to Thomson Reuters I/B/E/S data. That is down 15 percent on the second quarter of 2010.

CP's stock was 50 Canadian cents firmer at C$59.70 on the Toronto Stock Exchange on Wednesday afternoon.

($1=$0.96 Canadian)

(Reporting by Nicole Mordant; editing by Rob Wilson)