Flooding bogs down CP 2Q profitability

Flooding kept Canadian Pacific from joining its Class I brethren in setting record-breaking second-quarter results, with CP Wednesday reporting its second-quarter net income fell to C$128 million (US$135.7 million), or 75 Canadian cents per share. That still beat analyst expectations by two cents, but was 23% lower than the C$166 million, or 98 Canadian cents a share, posted in the second quarter of 2010.

Revenue rose slightly to C$1.26 billion, up from C$1.23 billion in 2010, but the improvement was limited by the impact of flooding on operations. CP said it recorded nearly 90 separate outages on its tracks during the three-month period ended June 30.

"We rerouted and detoured traffic over other railways and incurred significantly higher operating costs to ensure delivery of our customers’ shipments," said President and CEO Fred Green in a release.

CP said operating expenses rose to C$1.03 billion from C$960.1 million a year earlier, prompted largely by increased fuel prices.