CALGARY — Canadian Pacific Railway Ltd. is revising its financial guidance for the year and lowering its expectations as a result of the fallout from the COVID-19 pandemic.
The company is forecasting that revenue tonne miles — a key industry metric — will fall by mid-single digits and that adjusted diluted earnings per share will remain flat in 2020.
In the first quarter, CP Rail says net income dropped to $409 million from $434 million in the same period last year.
The six per cent drop comes despite a revenue increase of nearly 16 per cent year over year to $2.04 billion in the quarter ended March 31.
On an adjusted basis, diluted earnings increased 58 per cent to hit $4.42 per share, beating analyst expectations of $4.05, according to financial markets data firm Refinitiv.
Despite strong grain and crude-by-rail traffic for the Calgary-based railroad operator last quarter, analysts say Canada’s two main railways face a bleak year ahead as a looming recession weighs on freight volumes.
This report by The Canadian Press was first published April 21, 2020.
Companies in this story: (TSX:CP)
The Canadian Press