* First-quarter EPS C$0.34 vs C$0.59
* Revenue falls to C$1.07 bln from C$1.15 bln
* Plans to cut 2009 capital spending (Updates with conference call)
By Susan Taylor and Allan Dowd
OTTAWA/VANCOUVER, April 23 (Reuters) - Canadian Pacific Railway (CP.TO) (CP.N) reported a 31 percent decline in first-quarter profit on Thursday, as the global economic downturn badly hurt freight traffic volume, and said it plans to cut 2009 capital spending by close to 10 percent
The carrier was hit by sharp declines in shipments of automobiles, coal and potash, forcing it to continue idling cars, locomotives and employees as it pushes ahead with long-term measures such as consolidating locomotive-repair operations and closing some smaller freight yards.
Like other North American railways, CP saw its car loadings drop sharply, but chief executive Fred Green said it also got stung because it was its long-haul business, such as potash, that took the larger hit.
"We have a somewhat unique situation in that our length of haul, translating into RTM (revenue ton-miles), is substantially different than what has occurred elsewhere. It will also rebound equally quickly when those long-haul corridors come back," Green told analysts.
Green said Canadian Pacific's RTM was down about 22 percent, which compares with a drop of 14 percent in the same quarter at rival Canadian National Railway (CNR.TO).
Shipments of potash and coking coal are also off this month, but CP remains optimistic they will pick up later this year, along with other business. CP has not given any earnings guidance for 2009.
"The market will turn up. We don't know when," Green said.
Canadian Pacific said earnings fell to C$62.5 million ($50.8 million), or 34 Canadian cents a share, from C$90.7 million, or 59 Canadian cents a share, a year earlier.
The company, which operates in both Canada and the northern United States, said revenue fell to C$1.07 billion from C$1.15 billion.
UBS analysts Fadi Chamoun and Rick Anderson said the quarter "underwhelms" with earnings per share below its forecast of 37 Canadian cents and the average expectation for 48 Canadian cents.
"Notwithstanding benefit from favorable foreign exchange and pricing, which resulted in a 12 percent improvement in yields, CP's revenues declined by about 13 percent, overwhelming the company's cost reduction efforts," they said in a note.
Operating expenses were reduced to C$931 million from C$948.9 in the same period last year. CP said its ratio of operating expenses to operating revenues -- a transportation industry measure of efficiency -- was 87 percent, comparing unfavorably with 82.7 percent.
Calgary-based CP said it will reduce its capital spending program in 2009 to a range of C$720 million to C$740 million, below its November forecast of C$800 million to C$820 million.
With 23 percent of its locomotive fleet idled and 26 percent of its freight cars stored, the company has been able to cut spending that had been earmarked to overhaul that equipment, executives said.
Green said the railway needs to idle more cars, which will increase the profitability of those that remain in service. "We need to get those assets spinning more quickly," he said.
$1=$1.23 Canadian Reporting by Susan Taylor and Allan Dowd; editing by Rob Wilson