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Despite a grain-traffic-impacting drought, Canadian Pacific Railway increased first-quarter revenue to $879 million compared with $875 million in first-quarter 2002.


However, CPR's quarterly net income dropped to $102 million compared with $136 million during the same 2002 period, primarily because of rising fuel prices (up 26 percent) and severe winter weather conditions.


"Prolonged periods of extreme cold and heavy-snow buildup disrupted operations until mid-March, and required additional resources to mitigate the effect on service levels," said CPR President and Chief Executive Officer Rob Ritchie in a prepared statement. "As a result, operating efficiencies and productivity declined temporarily."


CPR's quarterly operating income declined $58 million to $118 million, operating expenses rose $61 million to $761 million and operating ratio worsened 6.6 points to 86.5 compared with first-quarter 2002.


The Class I previously announced plans to eliminate 300 positions later this year and implement other cost-reduction initiatives.