UPDATE 2-CP Rail profit hit by floods, derailment
TORONTO, July 24 (Reuters) - Canadian Pacific Railway on Wednesday reported a slightly lower-than-expected quarterly profit, hurt by floods and a number of high-profile derailments.
Record floods late last month in the Canadian oil and gas capital of Calgary, Alberta, curbed revenue growth by C$25 million, or 2 percent. The flooding caused extensive network outages, including more than 40 track washouts over a four-day period, Chief Executive Officer Hunter Harrison said in a statement.
The company, Canada's second-biggest railroad operator behind Canadian National Railway Co, also incurred about C$35 million in train accident-related expenses, compared with a more typical C$15 million, BMO analyst Fadi Chamoun said in a note to clients.
Shares of CP were down 2.3 percent at C$127.18 in Toronto after the results. The stock is still up about 70 percent since Harrison, an industry veteran, joined the company in June 2012 to turn it around.
CP has been plagued this year by a series of high-profile derailments and accidents involving petroleum products, raising questions of safety amid its huge efficiency campaign and job cuts.
Late last month, five rail cars carrying hazardous petroleum products derailed on a broken bridge in Calgary in the aftermath of the devastating flood that probably caused billions of dollars in damage.
In May, five tankers containing oil derailed near Jansen, Saskatchewan, and one of the cars spilled 575 barrels (24,150 gallons) of crude.
BY THE NUMBERS
Second-quarter net income rose to C$252 million ($244.86 million), or C$1.43 per share, from C$103 million, or 60 Canadian cents per share, a year earlier.
Analysts on average had been expecting earnings per share of C$1.49, according to Thomson Reuters I/B/E/S.
Revenue increased 10 percent to C$1.50 billion, missing analysts' estimates of C$1.52 billion.
Operating expenses fell 4 percent to C$1.1 billion, while operating income soared 76 per cent to C$420 million.
The company said its operating ratio, the percentage of revenue needed to maintain operations, had fallen to 71.9 percent, a quarterly record.
CP maintained its 2013 forecast of high-single-digit revenue growth and an operating ratio in the low 70s.