CALGARY, ALBERTA, CANADA — Net income at Canadian Pacific Railway Ltd. increased to C$724 million in the second quarter ended June 30, equal to C$5.19 per share on the common stock, up 66% from C$436 million, or C$3.05 per share, in the same period a year ago. Revenues increased 13% to C$1.977 billion from C$1.75 billion.
CP said it generated C$422 million in revenues from movement of grain in the second quarter, up 13% from C$372 million in the same period a year ago. In the first six months of fiscal 2019, revenues from movement of grain totaled C$802 million, up 10% from C$729 million.
“It was an extremely strong quarter for the bulk portfolio,” John Kenneth Brooks, executive vice-president and chief marketing officer, said during a July 16 conference call with analysts. “Grain was up 11%. Canadian grain and grain products delivered a record second quarter, up double digits. And both April and May were record months for volume, and from a tonnage perspective, this was the third-biggest quarter of all time for CP in grain. Seeding in Canada is now complete and as of right now we expect new crop to be in line with the past couple years.
“Additionally, we project carryout stocks to be normal but certainly more heavily weighted on the canola side. All this to say, we expect there to be good volumes of grain to move this fall. As a reminder, the new regulated grain pricing for CP taking effect on Aug. 1 will be 3.7%. But in contrast, U.S. grain volumes were down double digits as the PNW export market continued to be challenged due to the lingering trade dispute with China.
“We’re watching U.S. grain markets closely, though, because with the flooding and tough-growing conditions that have emerged across the Central and Eastern U.S. this might present a pretty good opportunity for CP grains into these areas that are expected to be short production.”