Railroad Week in Review:
Second Quarter 2003
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ending June 27, 2003
The latest RCAF exceeds 6%; impact on revenues could be a percentage
point or more. Montreal Maine & Atlantic is on the mend. Mexico's
Competition Commission OKs NAFTA Rail. CN makes divisional changes in
leadership and boundaries. The TRH soap opera continues. RRA buys ex-DRGW
line in Colorado. How to spot industry trends in a sideways stock market.
ending June 20, 2003
Three reasons why the news is less than cheerful for the merchandise
carload side of the house. Rail stock analysts see most rails overpriced
today based on current vs. historical PEs. Table. Chicago to get $billions
in funding to solve rail congestion problems. Shortline track expenditures
trending up in sample. CP writes down value of the D&H, exploring
options. FEC's winning ways. Tranz Rail stops asset sales program.
ending June 13, 2003
New Zealand as a cautionary tale about the care and feeding of branchline
traffic. Commentary on the implications of US parallels with the lessons
in NZ. GWR and RRA report carloads for May 2003 and YTD.
ending June 6, 2003
NS shortline meeting another bell-ringer. How NS copes with tradeoffs
between and among line capacity, line density, capex, operating costs
and revenue. Strategic Planning's "Thoughts on the NS Network" PPT.
CN backs away from the Ontario Northland on labor protection issues.
Great Lakes Transportation (B&LE, DMI&IR) is for sale. RailAmerica
wins BNSF lines in western Alabama plus the BNSF rights on NS to Mobile.
CSX and NS file to control outright the ex-Conrail lines they now lease
from the holding company. CSAO is NOT, NO HOW, NO WAY affected.
Nor is the CSAO about to go away, contrary to rumor.
ending May 30, 2003
Railroad stock prices and dividend yields relative to growth prospects
(Table). CP buying lumber cars and selling branchlines. The Fat Lady
has yet to sing in the New Zealand soap opera. NS to host shortlines
in Roanoke this week.
ending May 23, 2003
Notes on the ASLRRA'a Annual Meeting in Philadelphia. Why shortlines
are doing a great job wooing and winning customers. RailAmerica pulls
its TranzRail offer saying the due dilgence results didn't measure up.
More on why RR sales reps "gotta know the territory." CN posts shortline
presentation slides to www.cn.ca.
ending May 16, 2003
Genesee & Wyoming (GWR) posts 1Q03 net income of $5.4 mm, about
even with 1Q02. ASLRRA's Rich Timmons makes the railroads' case at Transportation
Week Luncheon at Philadelphia's Union League. Observations on why railroad
account managers can do a better job managing accounts. Technical indicators
for rail stock prices at odds with fundamentals; convergence is at hand.
RailAmerica in bid for New Zealand railroad. What is a shortline?
ending May 9, 2003
RailAmerica 1Q03 results show marginally higher sales and somewhat diminished
operating income. North American revenues up 5%, no change in expenses,
OR shaves four points. KCS preferred stock buyers pick up another $25
mm on options. NS shareholders narrowly defeat motion to end staggered
Board member terms. Annual Penn DOT Rail Freight Seminar another success.
CN has locos for sale at www.cn.ca under "Sale of Surplus Assets."
ending May 2, 2003
KCS yoy operating and net incomes decline due to lowered revenues and
increased operating expenses; further steps toward combining the KCS
Railroad, Tex-Mex and TFM. CSX reports 1Q03 with ops income down 13%;
OR goes north of 90.RRA kept net income about even with last year in
spite of another operting loss in Australia. Details next week, though
for now let me congratulate RRA for taking the NA operating ratio down
four points to 77.9 and reducing quarterly interest expense 21% to less
than $10 mm. On the equities side we look at yoy changes in net income
and stock price and compare potential earnings growth with price-earnings
multiples. Viewed in this light some names would appear pricey.
ending April 25, 2003
First quarter results for BNSF. CP, CN, NS, UP. Commentary on the core
merchandise carload business. UP's Ike Evans: "We just got through
the merger changes when the economy headed south. Now we're looking
for the opportunity to show what we can do with the product." NS says
price increases sticking because it's a better product.
ending April 18, 2003
It's becoming evident shipper have problems with railroads partly because
they don't see enough of the same railroad reps. We saw it a week ago
and NEARS and shippers were again in the minority at the Southeast meeting.
A reader offers some constructive thoughts. Two measures to watch in
the AAR weekly reports. CSX tapped as a GM "Supplier of the Year." RMI's
RailConnect (R) opens in St Louis. Greenbrier Industries turns the corner.
ending April 11, 2003
RailAmerica launches "Hearts and Rails" letter campaign for US troops
in Iraq, posts gains in total and "same railroad" traffic levels. AAR
rail freight volumes through Week 13 up 2.8% overall with merchandise
carloads ex-coal and ex-ag up 3.8%. Housatonic Railroad shortline 2002
carloads up 20% yoy. BNSF to reacquire 52-mile branch in western Montana.
North East Assn of Rail Shippers holds spring session on Cape Cod.
ending April 4, 2003
Solving the problem of the time lag between a car movement event and
the shortline reporting thereof. Three studies that highlight the degree
of lag and solutions from BNSF, NS, and RMI. FY 2002 results from the
Providence & Worcester.