Delayed harvest hits CP profit
Reuters — Canadian Pacific Railway reported lower-than-expected quarterly results and cut its full-year earnings forecast, due mainly to a delayed grain harvest and lower crude oil volumes.
The company said it now expects 2016 profit to grow in the mid-single digits, compared to the double digit growth it had expected in June.
“Given the delayed grain harvest, lower crude volumes and persistent economic challenges compounded by a strengthening Canadian dollar, we are now expecting mid-single-digit EPS growth this year,” chief executive officer Hunter Harrison said.
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Revenue fell more than nine percent to $1.55 billion, missing analysts’ estimates of $1.61 billion, according to Thomson Reuters.
However, a 6.2 percent decrease in costs helped the company post a higher quarterly profit.
The company said its profit rose to $347 million, or $2.34 per share, in the third quarter that ended Sept. 30, from $323 million, or $2.04 per share, a year earlier.
Excluding items, the company earned $2.73 per share, below estimates of $2.79.
China to cut corn, boost soybeans
BEIJING, China (Reuters) — China will reduce the area planted with corn and lift soybean acreage in the next five years, says the country’s cabinet, reiterating goals outlined earlier this year to adjust the nation’s crop structure to better meet demand.
China has encouraged farmers to expand corn planting and abandon soybeans in recent years by paying them inflated prices for corn. The policy, abandoned earlier this year, has left China with huge reserves of corn.
The government is now attempting to reverse that trend while also seeking ways to use up its huge stocks of grain.
The corn acreage is set to fall by .7 percent each year over the next five years to reach 82.3 million acres by 2020, showed the five-year plan.
Soybean area will rise to 23 million acres by 2020, up from 15 million in 2015.
The government also wants to promote “deep processing” of agricultural products such as corn and accelerate consumption of the grain, cotton and oil stockpiles, it said.
It did not give details on how such goals would be achieved, but the market is expecting further stockpile sales and government subsidies for processing.
Meat output is also set to grow slightly with promotion of large-scale farming of pigs and beef cattle, while dairy production should jump from 38.7 million tonnes to 41 million tonnes by 2020.
