cp rail

CANADIAN PACIFIC RAILWAY $123.16 (Toronto symbol CP; Shares outstanding: 174.6 million; Market cap: $21.9 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.cpr.ca) continues to benefit from a major restructuring plan, which includes new locomotives, better tracks and software that optimizes train loads and speeds.

In the first three months of 2013, CP’s earnings jumped 52.8%, to $217 million, or $1.24 a share. That beat the consensus estimate of $1.21. A year earlier, the company earned $142 million, or $0.82 a share.

Revenue rose 8.6%, to $1.5 billion from $1.4 billion. The company saw revenue gains from shipping consumer and industrial products (up 24.8%), fertilizers (up 20.6%), grain (up 9.0%), coal (up 8.8%) and forest products (up 6.0%). That offset declines in automotive products (down 7.6%) and intermodal (down 4.2%).
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CANADIAN PACIFIC RAILWAY LTD. $132 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 174.7 million; Market cap: $23.1 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.1%; TSINetwork Rating: Above Average; www.cpr.ca) continues to benefit from a major restructuring plan, which includes new locomotives, better tracks and software that optimizes train loads and speeds.

In the first three months of 2013, CP’s earnings jumped 52.8%, to $217 million, or $1.24 a share. A year earlier, the company earned $142 million, or $0.82 a share.

The higher earnings are mainly due to CP’s improving efficiency. Its operating ratio improved to 75.8% from 80.1% a year ago. The company aims to cut its operating ratio to 65% by the middle of 2016.
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CANADIAN TIRE CORP., $83.78, Toronto symbol CTC.A, jumped 13% this week after the company announced a plan to spin off most of its real estate holdings into a new, publicly traded real estate investment trust (REIT). Under the company’s plan, which is similar to a move by grocery retailer Loblaw Companies Ltd. (Toronto symbol L), Canadian Tire will transfer 250 of its stores, a distribution centre and other properties to the new REIT. In all, these assets total 18 million square feet and are worth $3.5 billion; that’s 72% of Canadian Tire’s 25 million square feet of real estate. After this transaction closes in the fall of 2013, Canadian Tire will sell units of the REIT to the public. It will hang on to an 80% to 90% interest. Meanwhile, the company earned $73.0 million in the three months ended March 31, 2013. That’s up 2.8% from $71.0 million a year earlier. Earnings per share rose 3.4%, to $0.90 from $0.87, on fewer shares outstanding. That matched the consensus estimate....

We made CP Rail (see box at right) our “Stock of the Year” for 2012 because we felt its earnings would jump if it cut costs and made better use of its trains. A U.S.-based activist investor agreed with us and brought in CN Rail’s former chief executive officer, Hunter Harrison, who helped make CN North America’s most efficient railroad.

Some investors feel that a stronger CP will hurt CN....

CANADIAN PACIFIC RAILWAY LTD. $132 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 174.7 million; Market cap: $23.1 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.1%; TSINetwork Rating: Above Average; www.cpr.ca) continues to benefit from a major restructuring plan, which includes new locomotives, better tracks and software that optimizes train loads and speeds.

In the first three months of 2013, CP’s earnings jumped 52.8%, to $217 million, or $1.24 a share....

CANADIAN PACIFIC RAILWAY $123.16 (Toronto symbol CP; Shares outstanding: 174.6 million; Market cap: $21.9 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.cpr.ca) continues to benefit from a major restructuring plan, which includes new locomotives, better tracks and software that optimizes train loads and speeds.

In the first three months of 2013, CP’s earnings jumped 52.8%, to $217 million, or $1.24 a share....

TECK RESOURCES LTD., $26.27, Toronto symbol TCK.B, reported lower quarterly revenue and earnings this week. That’s mainly because slowing industrial activity in China and elsewhere has hurt prices for its metallurgical coal, which is a key ingredient in steelmaking. Prices of Teck’s other commodities, such as copper and zinc, also declined. In the three months ended March 31, 2013, Teck earned $328 million, or $0.56 a share. These figures exclude unusual items, such as gains and losses on asset sales. On that basis, the latest earnings beat the consensus estimate of $0.41 a share. However, they are down 39.7% from $544 million, or $0.93 a share, a year earlier. Revenue fell 8.5%, to $2.3 billion from $2.5 billion. Even with the decline, the latest figure also beat the consensus estimate of $2.2 billion....

CANADIAN PACIFIC RAILWAY LTD. $124 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 174.6 million; Market cap: $21.7 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.1%; TSINetwork Rating: Above Average; www.cpr.ca) suffered two derailments in the past month that resulted in oil spills. One of these incidents was in Minnesota, and the other was in northern Ontario. However, the spills were minor, and the cleanup costs should not have a large impact on CP’s earnings.

The company should keep benefiting from rising demand for trains to ship oil. That’s because a lack of new pipelines has forced more producers to ship their crude by train. CP will probably ship 70,000 carloads of oil this year, up 438.5% from 13,000 in 2011.

CP Rail is a buy....

CANADIAN PACIFIC RAILWAY LTD. $124 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 174.6 million; Market cap: $21.7 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.1%; TSINetwork Rating: Above Average; www.cpr.ca) suffered two derailments in the past month that resulted in oil spills....

BLACKBERRY INC., $15.09, Toronto symbol BB, rose 2% on Thursday after the company reported much better-than-expected earnings. In its 2013 fourth quarter, which ended March 2, 2013, BlackBerry earned $114 million, or $0.22 a share (all amounts except share price in U.S. dollars). These figures exclude charges related to a restructuring plan that includes cutting the company’s workforce and simplifying its product lines. On that basis, the latest results easily beat the consensus forecast of a $0.34-a-share loss. A year earlier, BlackBerry lost $118 million, or $0.23 a share. Revenue fell 35.9%, to $2.7 billion from $4.2 billion. That’s mainly because customers were waiting for the company to launch new smartphones that use its BlackBerry 10 software. The company began selling these devices in Canada, the U.K. and other markets in February 2013. It started selling them in the U.S. on March 22, 2013....