Net income in last year's second quarter was C$103 million, or 60 Canadian cents per share, meaning current income "represents a 138% year-over-year improvement in earnings per share," Calgary, Alberta-based CP said.
CP's second-quarter revenue was C$1.5 billion up 9.6% from the comparable quarter in 2012 and also an "all-time quarterly record," the railroad said.
Despite the surge in earnings, CP's second-quarter net failed to meet Wall Street consensus analyst estimates of C$1.50 average estimate, attributed in part to floods and derailments interrupted service. Shares of CP were down 1.7% late Wednesday morning in trading on the New York Stock Exchange.
But Wall Street's first reaction appears misplaced, according to Jason Seidl, analyst at Cowen & Co. and a Railway Age contributing editor. "Despite the light top line, the company reported a solid operating income and per-share profit," Seidl wrote Wednesday in a note to clients.
Said CP CEO E. Hunter Harrison, "The second quarter was a significant test for our employees who worked tirelessly during extensive network outages, including more than 40 washouts over a four-day period of historic flooding in Calgary and southern Alberta." Harrison also noted that network interruptions during the quarter impacted revenue growth by approximately C$25 million or 2%.
"The disciplined execution of our model allowed us to quickly recover from these challenges and restore service for our customers in a timely manner," said Harrison. "Moving forward, CP is well positioned to continue to build upon its strong first half and deliver record financial and operating results for 2013."