Canadian Pacific lowers guidance for 2020 as it faces fallout from virus

Canadian Pacific lowers guidance for 2020 as it faces fallout from virus
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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

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