16 November 2006
Canadian Pacific Railway Sees 2007 Earnings Growth of 9 to 13 Percent
Canadian Pacific Railway Ltd. (TSX:CP) stock was little changed
Thursday after the company predicted its profit growth next year will be solid, but less than had been expected by some in the
investment community.
Leading into an annual analyst presentation, Calgary-based CP Rail forecast that earnings per share will rise by nine to
13 percent in 2007, with revenue up by four to six percent. Next year's earnings per share excluding currency effects and
one-time items are expected to be in the range of $4.30 to $4.45.
This would be up from $3.95, the top end of recently revised 2006 earnings guidance.
But it is at the low end of estimates for 2007 by analysts surveyed by Thomson Financial, who were forecasting $4.30 to $4.65 per
share.
CP Rail shares (Editor: Once again, there is no such entity as CP Rail. It is Canadian Pacific Railway Ltd.) dipped in early
trading, then edged up by 14 cents to $62.84 at midday on the Toronto Stock Exchange.
"CPR is poised to deliver improved results in 2007," stated CEO Fred Green.
"Execution of our integrated operating plan is driving increased fluidity on our network and improving our operating ratio. Our
people are engaged and their productivity continues to improve."
While revenue is seen growing by four to six percent next year, operating costs are expected to rise by three to five percent.
The company's 2007 outlook assumes crude oil prices averaging US$65 per barrel, a Canadian dollar worth 90 cents US, and North
American economic growth of 2.7 percent.
Capital investment is forecast at about $890 million, up from $840 million to $845 million this year.
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