Canadian Pacific Railway’s net income for the first quarter of 2017 tumbled 20.2 percent from the corresponding prior year period to $431 million Canadian (U.S. $320 million), according to the Class I railway’s financial statements released Tuesday.
Diluted earnings per share for the quarter totaled C$2.93, down from C$3.51 per share for the first quarter of 2016.
Adjusted earnings per share for the quarter stood at C$2.50, unchanged from a year prior and just above the Thompson Reuters consensus estimate of C$2.49 per share.
The C$0.43 difference between reported and adjusted earnings per share includes a $51 million gain associated with the early departure of previous CEO E. Hunter Harrison, who was selected last month to become CEO of Jacksonville, Fla.-based Class I railway CSX, which also released its quarterly earnings results Tuesday
Meanwhile, CP’s revenues for the quarter ticked up 0.8 percent year-over-year to C$1.6 billion, which industry analyst Stifel attributed to a 1.8 percent increase in volumes and a 0.8 percent drop in revenue per car.
"We turned a corner in March and are now seeing positive volumes, which makes us cautiously optimistic that the demand environment is improving,” CP President and CEO Keith Creel said.
Canada’s largest railroad, Canadian National, is scheduled to release its first quarter 2017 financial results on Monday.
In addition to revealing its earnings yesterday, Canadian Pacific said it ratified a five-year labor agreement with the United Steelworkers Local 1976 that covers about 600 administrative support and intermodal employees.
The agreement will take effect Jan. 1, 2018, ensuring wage increases of 2 percent each year over the term of the contract, and providing the opportunity for additional increases of 0.5 percent to 1 percent in the fourth and fifth years, depending on gains in revenue ton miles.
The railway said it has successfully negotiated long-term agreements with six of its seven Canadian unions, and has reached out to its unions that have agreements expiring at the end of 2017 to negotiate and implement new contracts ahead of expiry.