Ackman-Backed CEO Pushes CP Rail Profit Above Estimates

In recent news, Bill Ackman has not been the most favorably viewed activist investor, facing criticism for his announcement of a major short in Herbalife and personally announcing why he thinks J.C Penny, a company he owns a large stake of, failed to turnaround its sales. However, things are looking up for Ackman since he was vital to changing the CEO of Canadian Pacific Railway, which just posted profits that beat analyst estimates. Canadian Pacific Railway is working to remove its name as the “least efficient North American railroad.”

Since Hunter Harrison, the new CEO, took over, the stock of the company has seen a 72 percent gain. It is expected that the company will continue to cut and become a lean efficient railroad, utilizing its current momentum to further reduce costs. So far, Canadian Pacific Railway has only cut three-fourths of the total jobs planned, and the total is expected to reach 4,000 by 2013. Also, the better economic environment will help all companies involved with transportation of goods. Revenue growth is expected to grow at a very rapid pace in Canada due to crude oil. “Demand for oil is such that Chief Marketing Officer Jane O’Hagan said today that Canadian Pacific may be able to achieve a run-rate of 140,000 crude carloads by the end of 2015. The railroad carried 53,500 carloads of crude oil last year, a 19- fold increase from 2010.”


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