Canadian Pacific reviews 2007 earnings outlook



    Outlook for 2008 remains unchanged

    CALGARY, Dec. 12 /CNW/ - Canadian Pacific (TSX/NYSE:   CP) announced today
that adjusted diluted earnings per share for 2007 may be at the bottom of, or
even below, the range announced earlier this year of from $4.30 to $4.45. This
is a result of recent harsh weather conditions that caused disruptions in
train operations in CP's busy Western corridor, and a lag in the fuel recovery
program.
    "Canadian Pacific has delivered solid growth in adjusted diluted EPS of
12 per cent for the first nine months of 2007," said Fred Green, President and
CEO. "But with these stronger than expected headwinds in the fourth quarter,
there is a risk that earnings growth may not reach the level that we expected
for 2007 of nine per cent to 13 per cent. However, with a focus on execution
excellence and cost management, we remain confident we will deliver our
earnings target in 2008 of $4.70 to $4.85."
    Mike Lambert, Chief Financial Officer added, "With higher than
anticipated WTI prices and the 30-day lag between our fuel expenses and our
fuel recovery, combined with the effects of the severe weather patterns we
experienced in British Columbia in early December, there is a risk that
earnings may fall below the bottom end of our guidance of $4.30 for the full
year 2007."

    Note on forward-looking information

    This news release contains certain forward-looking statements relating
but not limited to our operations, anticipated financial performance and
business prospects. Undue reliance should not be placed on forward-looking
information as actual results may differ materially.
    By its nature, CP's forward-looking information involves numerous
assumptions, inherent risks and uncertainties, including but not limited to
the following factors: changes in business strategies; general North American
and global economic and business conditions; risks in agricultural production
such as weather conditions and insect populations; the availability and price
of energy commodities; the effects of competition and pricing pressures;
industry capacity; shifts in market demand; changes in laws and regulations,
including regulation of rates; changes in taxes and tax rates; potential
increases in maintenance and operating costs; uncertainties of litigation;
labour disputes; risks and liabilities arising from derailments; timing of
completion of capital and maintenance projects; currency and interest rate
fluctuations; effects of changes in market conditions on the financial
position of pension plans and investments; and various events that could
disrupt operations, including severe weather conditions, security threats and
governmental response to them, and technological changes.
    There are factors that could cause actual results to differ from those
described in the forward-looking statements contained in this news release.
These more specific factors are identified and discussed in the Outlook
section and elsewhere in this news release with the particular forward-looking
statement in question.
    CP undertakes no obligation to update publicly or otherwise revise any
forward-looking information, whether as a result of new information, future
events or otherwise except as required by law.

    Canadian Pacific, through the ingenuity of its employees located across
Canada and in the United States, remains committed to being the safest, most
fluid railway in North America. Our people are the key to delivering
innovative transportation solutions to our customers and to ensuring the safe
operation of our trains through the more than 900 communities where we
operate. Our combined ingenuity makes CPR a better place to work, rail a
better way to ship, and North America a better place to live. Come and visit
us at www.cpr.ca to see how we can put our ingenuity to work for you. Canadian
Pacific is proud to be the official rail freight services provider for the
Vancouver 2010 Olympic and Paralympic Winter Games.





For further information:

For further information: Media, Leslie Pidcock, Tel.: (403) 319-6878,
email: leslie_pidcock@cpr.ca; Investment Community, Janet Weiss, Assistant
Vice-President, Investor Relations, Tel.: (403) 319-3591, email:
investor@cpr.ca


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