CP Rail profit falls on restructuring charges

(Reuters) - Canadian Pacific Railway reported a 93 percent fall in fourth-quarter profit as it took charges related to labor restructuring and an impairment, but said it expects 2013 adjusted earnings per share to rise more than 40 percent.

CP, the No. 2 Canadian rail carrier behind Canadian National Railway Co, said it expects 2013 revenue growth in the high single digits and an operating ratio in the low 70s.

Chief Executive Hunter Harrison is pushing to improve the railway's industry-lagging efficiency to the mid-60 percent range in 2016 by slashing costs and exiting poorly performing businesses.

To that end, the railroad veteran is cutting 4,500 of CP's 19,500 jobs by 2016. Harrison was picked by CP's biggest shareholder, Pershing Square Capital Management, to replace Fred Green, who resigned during a bruising proxy battle last year.

CP's operating ratio, a key measure of a railway's productivity, improved to 74.8 percent, excluding items, in the quarter from 78.5 percent a year earlier. The lower the ratio, which calculates operating costs as a percentage of revenue, the more efficient a railway.

Net profit fell to C$15 million ($14.86 million), or 8 Canadian cents per share in fourth quarter from C$221 million, or C$1.30 per share, a year earlier.

Revenue rose 7 percent to C$1.50 billion.

Results were hurt by a C$53 million labor restructuring charge and C$185 million impairment related to its investments in the Powder River Basin in northeastern Wyoming and southeastern Montana.

Shares of the company, which has a market value of C$19.59 billion, closed at C$112.77 on Monday on the Toronto Stock Exchange.

They have soared more than 45 percent since Green's exit last May, reflecting high hopes for Harrison's turnaround.

(Reporting by Susan Taylor in Toronto and Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila)

Source: http://news.yahoo.com/cp-rail-profit-falls-forecasts-higher-2013-adjusted-124328496--finance.html

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