Newspaper article The Canadian Press

CP Rail Reports Lower Profits as Teamsters, IBEW Serve 72-Hour Strike Notice

Newspaper article The Canadian Press

CP Rail Reports Lower Profits as Teamsters, IBEW Serve 72-Hour Strike Notice

Article excerpt

CP Rail reports lower profits as strike looms


CALGARY - Severe winter weather that left grain farmers complaining about poor rail service is being blamed for disappointing first-quarter earnings at Canadian Pacific Railway Ltd. as it deals with the potential for further disruption amid a possible strike this weekend.

The company, which was handed 72-hour strike notices Wednesday by two unions representing about 3,400 of its workers, reported after markets closed that it earned $348 million in the first three months of the year, down from $431 million a year ago, despite a four per cent increase in revenue to $1.66 billion.

Reported diluted earnings per share were $2.41, an 18 per cent decrease from $2.93 a year earlier, and short of analyst expectations of $2.64 according to Thomson Reuters.

"The results we've just issued represent a very challenging quarter on the operating side with extreme cold temperatures and record snowfall," CEO Keith Creel said on a conference call, adding the issues were compounded by supply chain constraints and increasing demand in some territories.

On the labour dispute, Creel said he spoke with federal Labour Minister Patty Hajdu and Transport Minister Marc Garneau on Wednesday morning and said they are hopeful a deal can be worked out to prevent a work stoppage that would hurt Canada's economy.

"I'm remaining open-minded and optimistic as well but I also have to be a realist and we have to plan with our customers to make sure they have contingency plans," he said.

"I hope that we do not have to execute our's or their's but certainly we're taking steps as if we will."

The railroad is seeking a fair and balanced contract with its workers, he said, adding CP Rail won't sign a "bad short-term deal."

Commodity shippers fear further disruptions in getting their products to market if the strikes go ahead.

"A strike would just be another nail in the coffin of another really bad year for shipping," said Ron Bonnett, president of the Canadian Federation of Agriculture.

"All winter, the railways were only delivering about 40 per cent of the cars that were requested for shipping grain so there's a tremendous backlog of grain in the system right now. …

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