According to the release, revenue dropped 9% to C$1.55 billion from C$1.71 billion, which was below previous estimates of C$1.62 billion. The company reported profits for the third quarter of C$347 million, which was $265 million, rose from C$323 million in the same period last year. Earnings per share in the latest quarter was C$2.34 per share, increasing from C$2.04 per share in 2015. However, the results were below analysts’ expectation of C$2.79 per share. In the report, the company also posted diluted earnings per share of $2.34 per share, which increased 15% from $2.04. Adjusted diluted earnings per share was up 1% to $2.73.
Hunter Harrison, the Chief Executive of Canadian Pacific Railway, said in the release that the disappointing results was due to the “delayed grain harvest, lower crude volumes and persistent economic challenges compounded by a strengthening Canadian dollar”. Because parts of Canada’s Prairie Provinces receiving three times the normal rainfall, the grain will be harvest later than previous expected.
“While disappointed that we will not meet our previous forecast, I am incredibly proud that despite these challenges, CP will deliver its lowest-ever annual operating ratio,” Harrison said in a statement.
Based on the third quarter results, the CP lowered its profits target for the full year. The company said that the growth of annual earnings per share was expected to be in the mid-single-digits, which was lower than previous expectation of double-digit.
Shares of Canadian Pacific Railway decreased 1.3% to $151.44 per share in midday trading Wednesday.