Canadian Pacific Railway Ltd said on Tuesday it expected second-quarter revenue to fall about 12 per cent from a year earlier, hurt by weak commodity volumes, the Fort McMurray wildfire in northern Alberta and a stronger Canadian dollar.

The company said it expected adjusted earnings of about $2.00 per share. Canadian Pacific reported adjusted earnings of $2.45 per share in the second quarter of 2015.

The Fort McMurray wildfire sharply cut output from the Alberta oil sands, and the company was forced to temporarily halt services to the city.

Grain and potash volumes have also been weak.

However, CP said cost-cutting measures in the first half of the year and an expected improvement in commodity volumes would likely help the company meet its full-year guidance.

"While we acknowledge the environment remains challenging, additional cost reduction opportunities and the potential for stronger volumes in the back half of the year still lead us to believe that achieving double-digit EPS growth in 2016 is a possibility," Chief Executive Hunter Harrison said.

The Calgary-based company said it expected an operating ratio of about 62 per cent in the second quarter. CP reported an operating ratio of 60.9 per cent in the same quarter last year.

The operating ratio shows operating expenses as a per centage of revenue. The lower the figure, the better the performance.

CP's operating ratio was a record low 58.9 per cent in the first quarter.

The company's U.S.-listed shares were down about 2.9 per cent at US$123.75 in premarket trading.