* To buy back up to 6.91 mln shares, or 5 pct of float
* Raises dividend to C$0.50/shr from C$0.35
* Q1 adj earnings/shr C$2.22 vs est. C$2.40
* Q1 adj operating ratio of 58.9 pct lowest ever
(Adds comparison with analysts' estimates, Q1 details and
company background)
April 20 (Reuters) - Canadian Pacific Railway Ltd CP.TO
said on Wednesday it planned to repurchase up to 5 percent of
its shares, just over a week after abandoning a bid to buy
Norfolk Southern Corp (NYSE:NSC) NSC.N .
CP said it would buy back up to 6.91 million of its common
shares. As of Tuesday's close of C$189.95, the repurchase would
be worth about C$1.31 billion ($1.03 billion).
Canada's No. 2 railroad raised its quarterly dividend to 50
Canadian cents per share from 35 Canadian cents.
The company abandoned its efforts to buy Norfolk Southern
almost six months after it launched a $28 billion unsolicited
bid.
Norfolk Southern, the No. 4 U.S. railroad, had repeatedly
rejected CP's advances, saying the proposed terms were "grossly
inadequate" and that a deal would face substantial regulatory
risks.
CP had said a merger would enhance competition and create
new markets and options for customers across North America.
CP's net income rose about 69 percent to C$540 million, or
C$3.51 per share, in the first quarter ended March 31.
However, on an adjusted basis, the company's earnings fell
short of analysts' average estimate.
Excluding the impact of a strong U.S. dollar on the
company's U.S. dollar-denominated debt and a gain from the sale
of Arbutus rail corridor, the railroad's earnings were C$2.22
per share, lower than an estimate of C$2.40, according to
Thomson Reuters I/B/E/S.
Rail freight volumes have been hit by a fall in the prices
of commodities such as oil and coal, weighing on revenues across
the industry.
CP's revenue fell 4.4 percent to C$1.59 billion.
The company's operating ratio, a key efficiency measure,
improved to 58.9 percent, lowest ever on an adjusted basis, as
the company has been reducing costs to offset the impact of the
commodity rout.
The Calgary-based company said in January it aimed to push
its operating costs as a percentage of revenue below 59 percent
in 2016 from 60 percent in 2015.
($1 = 1.27 Canadian dollars)
(Reporting Amrutha Gayathri in Bengaluru; Editing by Saumyadeb
Chakrabarty and Maju Samuel)