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Significant weather-related disruptions in Western Canada weren’t enough to derail the earnings momentum at Canadian Pacific Railway. Today, CPR reported first-quarter net income of $114.8 million, an 18 percent increase compared with the same period a year earlier. Diluted earnings per share improved 21 percent to $0.82.

"CP's team delivered adjusted diluted EPS growth of 8 percent in the face of extremely difficult, weather-related operating conditions that challenged the entire transportation chain," said CPR President and Chief Executive Officer Fred Green in a prepared statement. “Our disciplined execution of the integrated operating plan, in addition to the investments in network capacity we've made in our Western corridor, paid major dividends for us this quarter.”

Revenue in sulphur and fertilizers increased 31 percent compared with first-quarter 2006. Intermodal and automotive revenue also were up 6 percent and 5 percent, respectively. However, softness in forest products offset some of the revenue growth; so did the aforementioned winter disruptions and the United Transportation Union strike at Canadian National Railway Co., both of which “increased network congestion [and] resulted in reduced shipments in coal and other commodities,” CPR says.

Even so, CPR’s operating expenses of $789.7 million represented an increase of only 0.3 percent compared with the same 2006 period. A drop in compensation and benefits expense helped offset fuel, inflation and winter-related expense increases.

“With the recent return to more normal operating conditions, we expect to move freight volumes with increasing efficiency and improved service levels through the balance of the year," Green said.

CPR execs also now expect to grow revenue between 4 percent and 6 percent in 2007. They’re also sticking with a capital investment figure between $885 million and $895 million; and after dividends, they expect free cash to exceed $300 million in 2007.

CPR also plans to buy back up to 15.5 million of its outstanding common shares for cancellation, representing about 10 percent of the public float.