(RTTNews) - Canadian Pacific Railway Limited (CP: News ,CP.TO: News ), an operator of transcontinental railway in Canada and the US, reported Tuesday an increase in net profit for the third quarter, helped mainly by gains related to two significant real estate sales. Meanwhile, revenues for the quarter declined sharply.

For the third quarter, the Calgary, Canada-based company's net income was C$195.4 million or C$1.16 per share compared to C$170.7 million or C$1.10 per share in the previous-year quarter.

On an adjusted basis, earnings for the quarter plunged to C$144 million or C$0.85 per share from C$184 million or C$1.19 per share a year ago.

On an average, 13 analysts polled by Thomson Reuters expected the company to earn $0.75 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted results exclude foreign exchange gain and loss on long-term debt and other specified items after tax as well as include sale of two large properties, which together had an impact on the company's earnings of C$0.31 per share.

During the quarter, the company completed two significant real estate sales, resulting in gains of C$79.1 million, or $68.1 million after tax. Windsor Station, the company's former head office in Montreal, was sold for proceeds of $80.0 million, including the assumption of a mortgage of $16 million due in 2011. The company also sold land in Western Canada for transit purposes for proceeds of $43 million.

The company noted that it will continue to occupy a portion of Windsor Station through a lease for a 10-year period after the sale. Consequently, part of the transaction is considered to be a sale-leaseback and a gain of $19.5 million related to this part of the transaction has been deferred and is being amortized over the remainder of the lease term, Canadian Pacific said.
Additionally, in the three-month period, Canadian Pacific incurred a foreign exchange loss on long-term debt of C$18 million after tax, against a foreign exchange gain on long-term debt of C$6 million after tax in the prior-year period.

Revenues for the third quarter plunged to C$1.09 billion from C$1.26 billion in the third quarter of fiscal 2008. Analysts expected the company to generate revenues of C$1.05 billion for the quarter.

Canadian Pacific's revenues from freight services were C$1.06 billion compared with C$1.24 billion, while other revenues rose to C$26.7 million from C$25.2 million a year earlier.

On a pro forma basis, the company's total revenue ton-miles, or RTMs, for the quarter was 28,021 million compared with 32,786 million, and freight revenue per RTM slipped to 3.79 cents from 4.09 cents a year earlier. Total carloads dropped to 602.4 thousand from 736.8 thousand, and freight revenue per carload was C$1,762 versus C$1,819 in the last-year period.

To receive FREE breaking news email alerts for Canadian Pacific Railway and others in your portfolio

 1   2   Next Page