Blanchard Railroad Week in Review, Second Quarter 2013

The Railroad Week in Review:
Second Quarter 2013

Current Issues. Available in Adobe Acrobat format only. You will need the free Adobe Acrobat reader.

Week ending June 28
It's all about the NS Shortline Meeting. Encouraging words about the role of Class II and III railroads going forward. Shortline share of NS revenue unit volumes over trailing five quarters. Table. Merchandise carload trends by commodity not encouraging. Wick Moorman on how short lines can help add merch carloads to the NS mix.

[No June 21 issue]

Week ending June 14
Parsing CSX vols thru Week 23: how productivity improvements and modest pricing gains can generate lower operating ratios and higher margins, charts and trends, why short lines may be challenged. GWR May car-counts up in North America. Further observations on the Hunter Harrison we-can-do-it-cheaper-than-short-lines theme.

Week ending June 7
Today it's all about Ackman selling off CP shares. Is it really "portfolio management" or is there something else going on? Compare CP and CN volume charts. CP the Rock of the North? Playing to Hunter's hunger for short lines.

Week Ending May 31
UBS Mid-quarter rail refresh. I take exception to their Sell rating on KCS. Impressive new wet-gas "fractionation" hub in eastern Ohio; AGR added to shortline crude-by-rail line haul list. Providence & Worcester 1Q2013 revs up 4%, rev units up 10% mainly on short-haul intermodal; merch carloads off 3%. Encouraging words from P&W President Scott Conti tho comp as pct revs stays unconscionably high.

Week Ending May 24
Thirteen short lines in the crude-by-rail space. Table. Santa Maria Valley has best year ever. Notes from the two-day Wolfe Transportation conference in NYC. I record eight panel discussions and give you the short form here. Write for specifics.

Week Ending May 17
YTD carload growth in the merch sector nothing to write home about; intermodal and crude-by- rail saving the day. Table. GWR same-store carloads up 4.4% YOY over pro forma vols as if RA and GWR were one a year ago. FEC increases Q1 sales 20% to $69 million. Insights from the 10-Q. Why FEC is a Work in Progress.

Week Ending May 10
BNSF 1Q2013 results from Berkshire 10-Q -- more detail than last time, excellent insights as to what's moving and why. What BNSF, Money Ball, the Oakland As and revenue ton-miles have in common.

Week Ending May 3
GWR wraps up earnings season with a stronger carload story than they could talk about in a World According to GAAP. Highlights from the ASLRRA 100th Birthday bash in Atlanta; why counting RTMs counts for more than ever.

Week Ending April 26
Comparing Class I first quarter earnings reports for railroad performance. Individual earnings call notes for CN, CP, NS. Common thread: smallish revenue-unit gains, CP scores particularly in revenue-driven metrics (RTMs, RPU), NS has second-highest OR after CP, all rails using temporary light revenue-unit counts to make long-term changes for making fixed costs variable take out variable costs. RTMs more important than car counts, further supporting my Money Ball theme: baseball managers want players who can get to first by any means; railroad managers want customers who can generate RTMs at low R-VC ratios.

Week Ending April 19
Earnings reports from CSX, UP, KCS. Common themes: flat vols, revs OK. But turn the cars, make customers happy and get ready for better days. How three non-Class Is are doing well by the crude-by-rail trade.

Week Ending April 12
Union Pacific first quarter analysis and outlook. Comparing NS and CSX commodity distribution trends and shortline impacts. Art Cashin on achieving good earnings in a sluggish economy. GWR March carloads as they relate to the rest of the Class II-III railroad community. Why what went around in 3Q2008 is coming around again.

Week Ending April 5
Drilling down into BNSF results where Wall Street can no longer take you (excerpted from earlier WIR Extra; for more info re WIR Extra series, please write). Two sides of the CP argument; why I am no longer long. Reader feedback on captive shipper thread; how missing new business opportunities can hurt cash flow and the ability to reinvest.

THE BLANCHARD COMPANY
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Roy Blanchard.215-913-7740 mobile, royblan@icloud.com
Laura Blanchard, 215-985-1445, lblanchard@rblanchard.com