CP Rail profits dip as costs from Kansas City Southern purchase outweigh revenue gains
EPS growth in the quarter was also impacted by the fact that CP issued about 262.6 million new common shares as part of the deal to buy KCS. So this quarter’s profits were diluted across more shares than last year.
A U.S. regulator is still reviewing the deal, which would make CP the first railroad to run from Canada through the United States to Mexico. On July 22, the U.S. Surface Transportation Board announced it will hold a three-day public hearing on the transaction in late September. CP still expects a decision from the board by early next year, chief executive Keith Creel said on a call with financial analysts on July 28.
, have been suffering through a drop in Canadian shipments this year after an extreme drought across the Prairies last summer shrank the grain harvest.Article content “We will continue to see the headwinds from the 40-per-cent smaller grain crop until this year’s harvest starts to come off the fields,” CP’s chief marketing officer, John Brooks, said on the call, adding that the new crop is expected to be more than 70 million metric tonnes, “in line, if not a little better” than historical averages.
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