The Successful Investor Hotline – Friday, July 27, 2012

Article Excerpt

CANADIAN PACIFIC RAILWAY LTD., $83.18, Toronto symbol CP, reported higher-than-expected earnings this week. That caused the stock to rise 10%. In the three months ended June 30, 2012, the company’s earnings fell 19.5%, to $103 million, or $0.60 a share. It earned $128 million, or $0.75 a share, a year earlier. A nine-day strike by CP’s locomotive engineers, conductors and yard workers cut its earnings by around $0.30 a share in the latest quarter. In addition, the company paid severance costs to its previous CEO and other expenses related to the hiring of Hunter Harrison as its new chief executive. These costs cut CP’s earnings by a further $0.30 a share. Without these items, CP would have earned $1.20 a share in the latest quarter. That’s well above the consensus estimate of $0.85. The company is starting to benefit from a major plan to improve its efficiency with new locomotives, upgraded tracks and software that optimizes train loads and speeds. This was the main…