March 11 (Reuters) - Canadian Pacific Railway , the country's second-largest rail operator, said on Tuesday it will buy back up to 5.3 million shares, or about 3 percent of its total outstanding shares, over the next year.
CP Rail, which said in late January it would decide soon on how to deploy its cash, has been hitting its long-term goals ahead of schedule and shares have soared following record quarterly results and operating ratio.
Analysts had been expecting either a dividend increase or a share buyback, or both, sometime this year.
Walter Spracklin of RBC Capital Markets said the announcement came earlier than anticipated and the share repurchase program was larger than the 4.4 million shares he expected CP to buy back in the first quarter of 2015.
Canadian Pacific shares were moderately higher, trading at C$172.12 on Toronto Stock Exchange early on Tuesday. This valued the buyback program of 5,270,374 common shares at about C$907 million ($816.71 million).
The program is scheduled to start on March 17 and is due to end no later than March 16, 2015.