Listen to this article
Canadian Pacific on Wednesday posted its first increase in quarterly revenue since 2015 and said it “turned a corner in March”.
Calgary-based CP, which runs one of North America’s largest rail networks, said its profit fell from C$540m a year ago, to C$431m in the three months ended in March. Earnings per share slid to C$2.93 a share, from C$3.51 a share in the year ago period.
However, revenues for the quarter climbed 1 per cent from a year ago to C$1.6bn — its first gain in six quarters.
“We turned a corner in March and are now seeing positive volumes, which makes us cautiously optimistic that the demand environment is improving,” Keith Creel, chief executive, said.
A drop in natural gas prices had curbed demand for coal and weighed on the top and bottom lines of freight carriers. But a rise in gas prices and expectations of softer regulations for the coal industry under President Donald Trump are expected to help revive demand for coal.
Mr Creel took the helm in January after Hunter Harrison abruptly announced he was retiring from the company forfeiting benefits and awards of about C$118m and his pension. Mr Harrison teamed up with activist investor Mantle Ridge to take the top job at CSX.
CP’s results came alongside those of rival CSX, which on Wednesday reported upbeat first quarter profit and sales growth.
Looking ahead, Mr Creel said he expects disciplined cost control will help CP deliver high single-digit adjusted earnings growth in 2017. “Given the strength of our foundation, rooted in precision scheduled railroading, we are well positioned to write the next chapter of this story – one that focuses on sustainable, profitable growth,” Mr Creel said.