Winter weather jolts CP first-quarter earnings

Canadian Pacific Railway reported a sharp drop in profit for the first quarter 2011 compared with first quarter 2010, citing severe winter weather.

CP said its 15,143 employee count increased by 613 during the quarter, but gave no indication of whether it would add employees the remainder of 2011.

First quarter 2011 train speeds fell by almost 14 percent and the number of train accidents soared by 57 percent — both attributed to a dramatic increase in the number of avalanches in the Canadian Rockies and winter-long blowing snow throughout CP’s North American rail network.

CP’s calendar-year 2010 profit increased by 39 percent.

The railroad’s first quarter 2011 operating ratio soared to 90.6 compared with 82.3 in the first quarter 2010. CP’s fourth quarter 2010 operating ratio was 77.6.

Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the higher is profit.

Canadian Pacific is primarily a Canadian railroad. Its U.S. holdings include Class I Soo Line and regional railroad Delaware & Hudson.