Railroad Week in Review:
Second Quarter 2008
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in Review, 4/4/2008
The outlook for new railcar builds is good or bad depending on who you
are. From Bairds Jon Langenfeld comes a helpful note on trucking
volumes. The Spring 2008 BNSF Short Line Newsletter once again zeros
in on short line asset utilization. The unit train vs. single carload
discussion continues. Why the present passenger push can only be good
for the freight rails.
in Review, 4/11/2008
equipment reinvestment thread (WIR 4/4/2008) continues with some highly
informative and constructive feedback from Mark Schmidt of BNSF. The
CSX/TCI battle takes another twist as TCI accuses the CSX chairman and
the board of insider trading in a 62-page federal court filing. Is the
bloom coming off the ethanol rose? Who's up and what to watch for during
the STB's Common Carrier hearings April 24-25.
in Review, 4/18/2008
Two things short lines must do before asking for a rate. Three WSJ tidbits
affecting grain-hauling short lines. CSX work in progress continues
with sequentially strong results. The forces of darkness and re-regulation;
Wadewitz sanguine. GWR carloads down for month and quarter.
in Review, 4/25/2008
Canadian National reported first quarter ops income down 7% to C$523
as revenues were relatively stagnant at plus 1% to a C$1.9 bn and expenses
were up 4% propelled largely by fuel. Canadian Pacific reported revenues
of C$1.1 bn, up 3%, with revenue units up 2% on RPU essentially unchanged
CSX, CN and CP on a number of measures. Norfolk Southern first quarter
revs hit a record $2.5 bn (do we hear $10 bn for the year??), up 11%
yoy, record revenues for ag, chems and coal, all up double-digits with
RPU gains in the same range.
in Review, 5/2/2008
Union Pacifics first quarter hat trick came in the form of record
revenues, record operating income and record eps. Kansas City Southern
in Q1 pushed railroad revenues up nearly 10%, and by holding ops expense
to an 8% gain leveraged a 15% ops income gain.
Wyoming did not have the best of quarters as ops income dipped 9%
yoy to $21 mm and expenses rose more than 17% on a revenue gain of
just 12%. BNSF took the top spots among the seven Class Is for percent
changes in total revenue, merch carload revenue, system RPU, increase
in merch carloads handled.
in Review, 5/9/2008
Tuesday's WSJ New Highs and Lows list was particularly instructive
for railroads, car builders and investors. A discussion of the present
scheme to move railroad accounting to replacement cost. Union Pacific
stock will split 2:1 on May 28; how additional share buy-back benefits
shareholders. VRS and PAR reopen Hoosick Jct Gateway.
in Review, 5/16/2008
Class I retained earnings, market cap and stock valuations; why short
lines ought to pay attention. Table. Tony Hatch notes from the ASLRRA
Annual. Morgan Stanley crop outlook OK for ISS roads; handling lines
may face some challenges. GWR revenue units for April 2008; down 6%
YTD. First impressions from Canadian Pacific's Connections 2008
short line conference. Norfolk Southern and Pan Am Rail agree to create
the Patriot Corridor.
in Review, 5/23/2008
How shortlines can profit quickly from what was said at the recent
CP short line meeting. Why not let short lines get a commission for
selling container loads for direct dray to the closest Class I intermodal
terminal? Proprietary analysis of the four car builders 1Q08
results ought to wave a lot of red flags for value investors and does
not show a lot financial strength in the sector. Indiana Rail Road
buys new power and cars for coal service. STB deems four Class Is
in Review, 6/6/2008
How WNYP uses its grant money to good advantage. Further discussion
of the merits and applicability of ECP. STB reconsiders paper barriers
-- be careful what you ask for.
in Review, 6/13/2008
Iowa State Sen. Matt McCoy, Democrat from Des Moines, writes in the
Des Moines Register about the dangers HR 2125 pose to the Iowa economy.
L.B. Foster orders received during May 2008 were the highest in Company
history. US manufacturers repatriating work that had been shipped
offshore as transportation costs rise. Patriot Rail adds fifth property.
Porter Collins obit.
in Review, 6/20/2008
Some details on how the flooding in Iowa and surrounding states has
impacted all transport modes, particularly half a dozen or so railroads
of all sizes from the UP to the Crandic. Morgan Stanley on what we're
likely to see when the waters recede. IAIS buys new power even as
the floods hit some of its biggest customers.
UBS and JP Morgan
see rails' Q2 earnings less robust. STB Round Two hearings on common
carrier obligations set for July 17 -- TIH a particular worry for
short lines. Why LB Foster gets a BUY rating from Janney. Ed Wolfe
on sale of Weyerhaeuser short line railroads. BNSF guides Q2 down
in Review, 6/27/2008
Though the official count is not in, it looks like TCI got four seats
on CSX Board. No management changes contemplated. Legislative unknowns
have serious strategic implications to the outcome. Tony Hatch sees
"Mutually-Assured Destruction component" to HR-2125. How
to add core capacity without building or buying new railroads. Shares
of car builders and track suppliers fall. Short line carloads as reported
by RMI's RailConnect Index.