CP Prospers Despite the Slowdown

Article Excerpt

Canadian Pacific Railway’s shares have held up well so far this year — despite a slowdown in the U.S. economy, a jump in fuel costs and extensive flooding in the U.S. Midwest. Meanwhile, the company is now undertaking a number of efficiency and cost-cutting measures that will add to gains when its markets recover fully. CANADIAN PACIFIC RAILWAY LTD. $65 (Toronto symbol CP; SI Rating: Average) transports freight over a rail network between Montreal and Vancouver. In the United States, subsidiaries connect CP’s Canadian lines to major hubs in the Midwest and Northeast. Alliances with other railways extend its reach to Mexico. In the three months ended June 30, 2008, CP’s revenue was unchanged at $1.2 billion. The lower U.S. dollar and lower shipments of automobiles and forest products slowed revenue growth. Earnings before one-time items fell 13.4%, to $0.97 a share from $1.12. CP’s profits dropped, despite steady revenues, partly from costs related to the U.S. Midwest flooding, but mostly due to…