Canadian Pacific Railway Ltd. (TSE:CP) rose to a record high after the nation's second-largest rail operator posted a 48 percent increase in second-quarter profit as revenue surged.
Shares climbed 4 percent to $205.77 at 10:08 a.m. in Toronto.
Net income rose to C$371 million, or C$2.11 per share, from C$252 million or C$1.43 per share, a year earlier, the Calgary-based company said in a statement today. That result beat the C$2.09 average of estimates.
Revenue increased 12 percent to C$1.68 billion, beating the C$1.65 billion average estimate.
Operating expenses were two per cent higher at $1.09 billion.
"The team has made great strides in my two years at CP and they continue to demonstrate resiliency by delivering these results despite continued operational challenges in the US Midwest after a devastating winter," Chief Executive Officer E. Hunter Harrison said in the statement. "The future is very promising for the railroad as we transition towards leveraging our lower cost structure and improved service."
Canada's two biggest railways--Canadian Pacific and Montreal-based Canadian National Railway (TSE:CNR)--have been under pressure to tackle a backlog of shipments partly from bad weather throughout the winter that caused transportation problems.
Revenues from freight services increased 13 percent from the prior-year period to C$1.64 billion, while other revenues were flat with last year at C$39 million.
Canadian grain freight revenues expanded 32 percent from last year to C$252 million, while U.S. grain freight revenues increased 26 percent to C$115 million.
Canadian Pacific's total revenue ton-miles or RTMs for the quarter rose 7 percent from the year-ago period to 38.43 billion, while total freight revenue per RTM increased 5 percent from last year to 4.27 cents.
Crude oil shipments rose by 18 per cent.
In May, Canadian Pacific sold the western part of its Dakota, Minnesota and Eastern Railroad for net proceeds of $236-million, and said it expects the deal to be final in the third quarter.
Canadian National Railway reports quarterly results next week.