Increased shipping to spur CP Rail

Article Excerpt

CP Rail has moved down lately, as the railway shipped less grain, potash and crude oil. The Alberta wildfires further reduced oil shipments. However, recovering commodity prices should spur shipments—and profits—later this year. CANADIAN PACIFIC RAILWAY $164.05 (Toronto symbol CP; Shares outstanding: 153.0 million; Market cap: $25.1 billion; TSINetwork Rating: Above Average; Yield: 1.2%; www.cpr.ca) ships freight over a 22,000-kilometre rail network between Montreal and Vancouver. It links to hubs in the U.S. Midwest and northeast. In the three months ended March 31, 2016, CP’s earnings per share, excluding one-time items, rose 10.6%, to $2.50 from $2.26 a year earlier. Revenue decreased 4.4%, to $1.71 billion from $1.67 billion. The company’s operating ratio improved to a record 58.9% from 63.2% a year ago. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.) CP expects its revenue in the second quarter of 2016 to decline by about 12% from a year earlier. As…