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Today, Canadian Pacific Railway reported first-quarter net income of $24 million, a 76 percent decrease compared with $102 million in first-quarter 2003. However, excluding foreign exchange gains and losses on long-term debt, quarterly net income of $38 million rose 3 percent compared with the same 2003 period.

Quarterly revenue of $887 million rose 1 percent and intermodal revenue of $245.9 million increased 12 percent compared with last year. But quarterly operating income of $116 million dipped 1.7 percent and CPR's quarterly operating ratio of 86.9 worsened 0.3 points.

"The worst avalanche in eight years and severe weather early in the quarter hit us hard in our western corridors over a two-week period," said CPR President and Chief Executive Officer Rob Ritchie in a prepared statement. "With heavy freight volumes fully consuming available capacity, there was no opportunity to recover the lost volumes in the quarter."

Because of a stronger Canadian dollar vs. the U.S. dollar, CPR's quarterly operating expenses increased $46 million and operating income dipped $13 million. Quarterly operating expenses of $771 million increased 1.2 percent compared with the same 2003 period.

But by quarter's end, CPR had gotten past its operational difficulties and business began picking up.

"There has been a dramatic surge in demand across most of CPR's lines of business and we are working with our customers to assess the sustainability of this new level of demand," said Ritchie. "Our short-term response is to hire crews for trains, increase the number and productivity of freight cars, and bring on 41 high-performance locomotives in the second quarter of 2004 and another 25 in the fourth quarter."