CALGARY, June 21, 2016 /PRNewswire/ - Canadian Pacific
Railway Limited (TSX: CP) (NYSE: CP) today announced it is
providing an earnings outlook for the second-quarter of 2016 due to
lower-than-anticipated volumes in bulk commodities, such as grain
and potash, the unexpected and devastating wildfires in northern
Alberta and a strengthening
Canadian dollar.
CP now expects revenues to decline approximately 12 percent from
the same quarter a year ago, adjusted diluted earnings per share of
approximately $2.00 and an operating
ratio of about 62 percent.
Given the transitory nature of these impacts, CP remains
confident in its business model and believes actions taken in the
first half of the year – coupled with an anticipated improvement in
commodity volumes – provide a path for the company towards meeting
its full-year guidance.
"CP will continue to focus on controlling costs in a difficult
environment," said E. Hunter
Harrison, CP Chief Executive Officer. "While we acknowledge
the environment remains challenging, additional cost reduction
opportunities and the potential for stronger volumes in the back
half of the year still lead us to believe that achieving
double-digit EPS growth in 2016 is a possibility."
CP will release its second-quarter financial and operating
results at 8:30 a.m. eastern time
(6:30 a.m. mountain time) on
July 20, 2016.
The company will discuss its results with the financial
community in a conference call beginning at: 11 a.m. eastern time (9
a.m. mountain time) on July
20.
Conference Call Access
Toronto participants dial in number:
1-647-427-7450
Operator assisted toll free dial in number:
1-888-231-8191
Callers should dial in 10 minutes prior to the call.
Webcast
We encourage you to access the webcast and
presentation material in the "Investors" section of CP's website at
http://www.cpr.ca/en/investors/earnings-releases
A replay of the second-quarter conference call will be available
by phone through to August 17, 2016
at 416-849-0833 or toll free 1-855-859-2056, password 38007320.
Access to the webcast and audio file of the presentation will be
made available at:
http://www.cpr.ca/en/investors/earnings-releases
Non-GAAP Measures
The Company presents non-GAAP
measures to provide a basis for evaluating underlying earnings
trends in the Company's business that can be compared with the
results of operations in prior periods. In addition, these non-GAAP
measures facilitate a multi-period assessment of long-term
profitability allowing management and other external users of the
Company's consolidated financial information to compare
profitability on a long-term basis, including assessing future
profitability, with that of the Company's peers.
This press release presents Adjusted diluted earnings per share
which has no standardized meaning and is not defined by GAAP and,
therefore, may not be comparable to similar measures presented by
other companies. The presentation of this non-GAAP measure is not
intended to be considered in isolation from, or as a substitute
for, or as superior to, the financial information presented in
accordance with GAAP.
Adjusted Performance Measures
The Company uses
Adjusted diluted earnings per share to evaluate the Company's
operating performance and for planning and forecasting future
business operations and future profitability. This non-GAAP measure
provides meaningful supplemental information regarding operating
results because it excludes certain significant items that are not
considered indicative of future financial trends either by nature
or amount. As a result, these items are excluded for management
assessment of operational performance, allocation of resources and
preparation of annual budgets. These significant items may include,
but are not limited to, restructuring and asset impairment charges,
individually significant gains and losses from sales of assets and
certain items outside the control of management. These items may
not be non-recurring. However, excluding these significant items
from GAAP results allows for a consistent understanding of the
Company's consolidated financial performance when performing a
multi-period assessment including assessing the likelihood of
future results. Accordingly, these non-GAAP financial measures may
provide insight to investors and other external users of the
Company's consolidated financial information.
The significant item that will impact reported second-quarter
2016 is a non-cash gain or loss due to FX translation of the
Company's U.S. dollar-denominated debt which may favourably or
unfavourably impact Diluted EPS. As the U.S. to Canadian
dollar exchange rate at June 30, 2016
cannot be predicted, it is not possible to accurately predict
either the FX translation on the Company's U.S. dollar-denominated
debt or GAAP reported diluted earnings per share. As a result
neither GAAP reported diluted earnings per share or a
reconciliation of Adjusted diluted earnings per share to reported
diluted earnings per share can be presented at this time.
Note on forward-looking information
This news release
contains certain forward-looking information within the meaning of
applicable securities laws relating, but not limited, to our
operations, priorities and plans, anticipated financial
performance, including our second quarter 2016 outlook, 2016
full-year guidance, business prospects commodity volumes,
planned capital expenditures, programs and strategies. This
forward-looking information also includes, but is not limited to,
statements concerning expectations, beliefs, plans, goals,
objectives, assumptions and statements about possible future
events, conditions, and results of operations or performance.
Forward-looking information may contain statements with words or
headings such as "financial expectations", "key assumptions",
"anticipate", "believe", "expect", "plan", "will", "outlook",
"should" or similar words suggesting future outcomes. To the extent
that CP has provided guidance using non-GAAP financial measures,
the Company may not be able to provide a reconciliation to a GAAP
measure, due to unknown variables and uncertainty related to future
results.
Undue reliance should not be placed on forward-looking
information as actual results may differ materially from the
forward-looking information. Forward-looking information is not a
guarantee of future performance. By its nature, CP's
forward-looking information involves numerous assumptions, inherent
risks and uncertainties that could cause actual results to differ
materially from the forward-looking information, including but not
limited to the following factors: the key assumptions identified
above; changes in business strategies; general North American and
global economic, credit and business conditions; risks in
agricultural production such as weather conditions and insect
populations; the availability and price of energy commodities; the
effects of competition and pricing pressures; industry capacity;
shifts in market demand; changes in commodity prices; uncertainty
surrounding timing and volumes of commodities being shipped via CP;
inflation; changes in laws and regulations, including regulation of
rates; changes in taxes and tax rates; potential increases in
maintenance and operating costs; uncertainties of investigations,
proceedings or other types of claims and litigation; labour
disputes; risks and liabilities arising from derailments;
transportation of dangerous goods; timing of completion of capital
and maintenance projects; currency and interest rate fluctuations;
effects of changes in market conditions and discount rates on the
financial position of pension plans and investments; and various
events that could disrupt operations, including severe weather,
droughts, floods, avalanches and earthquakes as well as security
threats and governmental response to them, and technological
changes. The foregoing list of factors is not exhaustive.
These and other factors are detailed from time to time in
reports filed by CP with securities regulators in Canada and the
United States. Reference should be made to "Item 1A - Risk
Factors" and "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Forward-Looking
Information" in CP's annual and interim reports on Form 10-K and
10- Q.. Readers are cautioned not to place undue reliance on
forward-looking information. Forward-looking information is based
on current expectations, estimates and projections and it is
possible that predictions, forecasts, projections, and other forms
of forward-looking information will not be achieved by CP. Except
as required by law, CP undertakes no obligation to update publicly
or otherwise revise any forward-looking information, whether as a
result of new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific
(TSX:CP)(NYSE:CP) is a transcontinental railway in Canada and the
United States with direct links to eight major ports,
including Vancouver and
Montreal, providing North American
customers a competitive rail service with access to key markets in
every corner of the globe. CP is growing with its customers,
offering a suite of freight transportation services, logistics
solutions and supply chain expertise. Visit cpr.ca to see the rail
advantages of Canadian Pacific.
SOURCE Canadian Pacific