Increased traffic in potash and intermodal containers offset an eight per cent drop in grain carloads in Canadian Pacific Railway’s first quarter, against higher costs and “challenging” conditions.

Calgary-based CP on Wednesday booked net income of $348 million on gross revenues of $1.662 billion for the quarter ending March 31, down from $431 million on $1.603 billion in the year-earlier period.

Describing March in particular as “one of our best months in recent history,” CP CEO Keith Creel nevertheless called Q1 “a challenging quarter, as we battled extreme weather and unprecedented demand, specifically in the northern reaches of our network.”

That said, the railroad delivered four per cent more carloads in Q1 compared to the year-earlier period, particularly in its energy, chemicals and plastics segment (74,200, up 11 per cent), potash (37,300, up 19 per cent) and intermodal (251,400, up eight per cent).

CP’s grain handle dropped eight per cent in the quarter, to 97,700 carloads, for revenues of $357 million, down nine per cent. Grain freight revenue per carload thus came in at $3,650, down one per cent.

CP’s overall operating expenses in Q1 rose 12 per cent from the year-earlier period, most notably in fuel ($215 million, up 26 per cent), compensation and benefits ($374 million, up 25 per cent) and materials ($55 million, up 12 per cent).

With winter largely past, CP “built a tremendous amount of momentum through March,” Creel said in a release Wednesday, “positioning us well for the rest of the year.” — AGCanada.com Network