Canadian Pacific Railway (NYSE: CP) reported Q2 EPS of Cdn$4.66, versus Cdn$5.17 reported last year. Revenue for the quarter came in at Cdn$1.79 billion versus the consensus estimate of Cdn$1.98 billion.

Second-quarter highlights

• Revenues decreased by 9 percent to $1.79 billion from $1.98 billion last year
• Reported diluted EPS of $4.66, a 10 percent decrease from $5.17 last year, and adjusted diluted EPS of $4.07, a 5 percent decrease from $4.30 last year
• Operating ratio was a second-quarter record 57.0 percent, a 140 basis point improvement over last year's second-quarter operating ratio of 58.4 percent

"While economic uncertainty remains, we're controlling what we can control - our costs," said Creel. "Our strong bulk franchise, which included record movements for Canadian grain and potash in the first half of the year, helped to offset some of the declines we experienced in other lines of business. Given our strong cost control measures, industry-leading execution of the PSR model, and improved clarity on the volume environment, we now expect positive adjusted diluted EPS growth for the year. As a result of the continued strength of our balance sheet, we have also restarted our share repurchase program."

Updated outlook

Based on the strength of the company's performance to date, CP now expects to deliver adjusted diluted EPS growth year over year1. CP continues to expect capital expenditures of $1.6 billion and a mid-single digit decline in revenue ton-miles.

CP's revised earnings guidance assumes a Canadian-to-U.S. dollar exchange rate of approximately 1.35 as compared to 1.40 previously, other components of net periodic benefit recovery to decrease by approximately $40 million as compared to 2019 and an effective tax rate of approximately 24.8 percent as a result of the accelerated reduction of the Alberta corporate tax rate as compared to 25.0 percent previously.

"The completion of our recent acquisition of the Central Maine and Québec Railway, combined with our continuing pipeline of unique growth opportunities, provides me with optimism for the remainder of 2020 and into 2021," Creel said.

1 CP's expectation for positive growth in 2020 adjusted diluted EPS is relative to 2019's adjusted diluted EPS of $16.44. CP's reported diluted EPS was $17.52 in 2019.

For earnings history and earnings-related data on Canadian Pacific Railway (CP) click here.