NEW YORK (TheStreet) -- Canadian Pacific Railway (CP) was rising 7.63% to $152.68 shortly after noon on Wednesday after Canada's second-largest railway announced that its profits had increased five-fold in the fourth quarter, while freight revenue increased 7%.
Net profit increased to $82 million Canadian, or 47 Canadian cents per share, in the quarter that ended Dec. 31, compared to C$15 million, or eight Canadian cents a share, in the same period one year earlier. Revenue rose 7% to C$1.6 billion. The company reported that it expects adjusted earnings per share to increase at least 30% and revenue to increase 6% to 7% in 2014 compared to 2013.
The railway also announced that it earned C$1.91 per share, excluding a pre-tax asset impairment charge and other one-time items. This fell just under the C$1.95 expected by analysts polled by Thomson Reuters I/B/E/S.
TheStreet Ratings team rates CANADIAN PACIFIC RAILWAY LTD as a "buy" with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CANADIAN PACIFIC RAILWAY LTD (CP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."