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Dec. 2, 2015, 12:17 PM
- Transportation stocks are lower on the day on some broad macroeconomic concerns. Some BAML downgrades in the sector are also weighing on sentiment.
- Trading is notably weak in CXS Corp (CSX -2.3%), American Railcar Industries (ARII -2.6%), Kansas City Southern (KSU -1.9%), YRC Worldwide (YRCW -5.7%), Heartland Express (HTLD -3.7%), Swift Transportation (SWFT -3%), FedEx (FDX -0.9%), UPS (UPS -0.5%), Air Transport Services (ATSG -1.7%), and Matson (MATX -2.5%).
- A notable exception to the sector slide is airline stocks which are showing strength after Delta Air Lines (DAL +2.7%) reported some eye-opening capacity constraint. The major carrier increased passenger revenue per available seat mile sand load factor during November. A 3% decline in crude oil prices is also factoring in to the rally in airline stocks.
- United Continental (UAL +3.2%), Hawaiian Holdings (HA +2.9%), Southwest Airlines (LUV +2.3%), and Republic Airways Holdings (RJET +4.4%) are all solidly higher.
- The Dow Jones Transportation Average is down 0.8% off the conflicting forces of gravity.
- Related ETFs: IYT, XTN, JETS.
Nov. 10, 2015, 6:31 PM
- The U.S. Department of Transportation denies an appeal by railroads challenging new crude-by-rail rules that require the installation of expensive new brakes on trains hauling hazardous flammable materials.
- The rules issued in May include the phasing in of tougher tank car standards over several years and requirements for new braking systems on trains hauling more than 70 cars of crude oil by 2021.
- Relevant tickers include CSX, NSC, UNP, KSU, BRK.A, BRK.B, CNI, CP, TRN, GBX, WAB, ARII, RAIL
- Earlier: Norfolk Southern CEO says new rules could make oil-by-rail too expensive (May 5)
Nov. 10, 2015, 2:13 PM
- CSX Corp. (CSX +0.3%) reaffirms its earnings guidance for the year but warns that energy market headwinds would hurt 2016 results.
- The rail company says growth will be led by intermodal transport, "as CSX continues to drive highway-to-rail conversions to capture a share of the estimated 9M loads in the east that are well-positioned for intermodal service."
- CSX says it sees current quarter earnings to fall slightly Y/Y - analysts expect a 3% decline to $0.48/share - and continues to target mid-single-digit FY 2015 EPS growth as intermodal growth and efficiency initiatives offset ~$450M in coal revenue declines; analysts expect ~$2/share for the year.
- CSX also says it continues to expect "meaningful margin expansion" in 2015 and a mid-60s operating ratio in the longer term.
Nov. 9, 2015, 2:10 PM
- Shares of Norfolk Southern (NSC +12.2%) and Canadian Pacific (CP +6%) spike on reports the companies are considering a merger.
- The speculation is giving a lift to a good portion of the sector with CSX (CSX +3.7%), Union Pacific (UNP +2.2%), and Kansas City Southern (KSU +2.9%) all notable movers.
- Railroad M&A talk has picked up this year as some market caps have moved down.
Oct. 30, 2015, 1:04 PM
- U.S. rail traffic fell 5.6% to 553,144 carloads and intermodal units for the week which ended on October 24. Intermodal volume was off 3.7% for the period.
- Weak traffic was seen for the transport of petroleum (-21%), metallic ores/metals (-19%), and coal (-13%). Grain and motor vehicles were the commodities groups which showed traffic strength once again.
- Mexican and Canadian railroads also reported a drop in traffic.
- Total combined U.S. traffic is down 1.3% YTD to 22.962M carloads and intermodal units.
- Total combined North American rail volume is off 1.1% YTD to 29.895M carloads and intermodal units.
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI, WAB, TRN.
Oct. 27, 2015, 3:29 PM
- Railroad and trucking stocks are down today on a mix of news seen as negative for the transportation sector. UPS reported lower package volume in Q3 and durable-goods orders fell in September.
- Decliners include Norfolk Southern (NSC -3.6%), Union Pacific (UNP -5.1%), CSX Corporation (CSX -3.8%), Kansas City Southern (KSU -4.4%), Canadian Pacific(CP -5.4%), Canadian National Railway (CNI -3.9%), Genesee & Wyoming (GWR -5.3%), XPO Logistics (XPO -11.8%), Echo Global Logistics (ECHO -12.6%), C.H. Robinson Worldwide (CHRW -2.8%), Radiant Logistics (RLGT -7.9%), FedEx (FDX -1.4%), Air T (AIRT -5.9%), and Air Transport Services (ATSG -3.2%).
- The iShares Dow Jones Transportation ETF (NYSEARCA:IYT) is down 2.7%.
- Related: Tough day for four wheelers (Oct. 27)
Oct. 27, 2015, 2:13 AM
- Railroads are amplifying warnings that the U.S. transportation network could grind to a halt at the start of the new year if Congress makes them stick to a year-end deadline to install a new safety system called "positive train control" - rail's version of air traffic control.
- The railroads appear likely to get their wish. Late Friday, lawmakers tacked a three year extension on to a transportation funding bill, which is widely expected to pass both houses this week.
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI, WAB, TRN, GWR, TRN, RAIL
Oct. 20, 2015, 12:15 PM
- CSX (CSX +1.9%) says it is closing mechanical shops in Corbin, Ky., affecting ~180 employees at the operation, as the company continues to respond to lower coal traffic volume.
- The Corbin shops are used primarily to serve locomotives and rail cars for coal trains moving from Central Appalachia to the eastern U.S.
- CSX says the closure is the result of reduced need for locomotive and car maintenance because of the significant decline of the region's coal traffic.
Oct. 19, 2015, 6:45 PM
- Railroads warn they are on track to miss a Dec. 31 deadline for installing complex new safety technology on trains that carry cargo, and are pushing Congress to extend the deadline or else oil, gasoline and other goods moved by rail could be stopped in their tracks, FuelFix reports.
- Major U.S. freight railroads, including BNSF (BRK.A, BRK.B), CSX and Norfolk Southern (NYSE:NSC), have said they will shut down many operations on Dec. 31 to comply with the deadline and avoid hefty fines; because railroads would be forced to begin shutting down services weeks earlier, they need a clear signal from Congress before the end of October, Association of American Railroads president Ed Hamberger says.
- The repercussions could be critical for the oil and gas industry, which has increasingly turned to rail to move crude and refined petroleum products across North America; railroads transported nearly 30K carloads of crude in 2010 but carried nearly 16x that amount in 2014.
Oct. 19, 2015, 6:14 PM
- CSX is added to J.P. Morgan’s Focus List, as the firm says it offers “the best upside [among rail stocks] to improving low track densities as the company leverages more locomotives into better service and intermodal growth.”
- CSX is JPM's “favored Eastern rail stock," and the firm thinks the company’s access to interior coal basins could aid utility customers in leveraging “emission control equipment by providing cheaper, higher sulfur coal than commonly found in Eastern coal basins.”
- JPM expects CSX’s service metrics to recover in 2016, with track densities and volumes being driven higher by the company’s locomotive fleet expansion, which the firm says is the largest in the group.
Oct. 15, 2015, 9:43 AM
- CSX Corp. (CSX +0.4%) says it plans to reduce train operations at its yard in Erwin, Tenn. because of sharply lower coal traffic through the region, resulting in the loss of ~300 jobs.
- CSX says it will close a locomotive service center, a project and car shop, and eliminate switching operations at the yard that primarily serves coal trains moving from central Appalachia.
- CSX says its coal revenue has declined by ~$1B during the past four years, as low natural gas prices and regulatory actions significantly reduced coal movements.
- Earlier: CSX says rail volume slump likely to persist (Oct 14)
Oct. 14, 2015, 3:59 PM
- CSX (CSX -1.8%) expects rail volumes to continue to fall through the end of the year, so CEO Michael Ward says in this morning's earnings conference call that the company will focus on productivity and raising prices over the coming year.
- With domestic coal carloads expected to drop 20% in Q3, CSX says it is looking to make each cargo train more productive by further stretching bulk cargo trains after adding ~10% more cars to their locomotives from a year ago.
- CSX says it expects to continue to gain market share and command strong prices, and the automotive industry should continue to boost shipments by rail, but chemicals will be lower in Q4, with crude oil volumes falling by at least 25% Q/Q, and metals will continue to be hit as a strong dollar fuels imports and domestic production falls.
- CSX says its core pricing rose 4.4% during Q3; "we continue to see a good pricing environment out there," Ward says.
Oct. 13, 2015, 5:33 PM
- CSX +1.1% AH after beating Q3 earnings estimates as gains in price were offset by a combination of lower fuel recovery, a 3% volume decline and continued transition in its business mix.
- Every category of freight hauled by CSX fell during Q3, but coal accounted for nearly half of the company's 8.7% Y/Y revenue drop, as coal revenue fell 19% to $583M from $721M a year earlier.
- CSX says it expects coal revenue to fall by ~$450M in FY 2015, which would represent a nearly 16% drop from $2.85B in 2014.
- CSX reaffirms its full-year expectations for EPS growth in the mid-single digits as it progresses toward a longer-term goal of a full-year operating ratio in the mid-60s; targets remain intact despite expectations for 2015 coal revenue to drop ~$450M Y/Y, with domestic coal volume declining by more than 10%, but the company sees significant coal headwinds continuing in 2016.
- CSX has been facing the same coal-related difficulties as other rail companies, but it typically earns ~20% of revenues from coal vs. 15% for the sector.
Oct. 13, 2015, 4:05 PM
- CSX (NYSE:CSX): Q3 EPS of $0.52 beats by $0.02.
- Revenue of $2.94B (-8.7% Y/Y) misses by $40M.
- Shares +1.8%.
Oct. 13, 2015, 1:12 PM
- Transportation stocks are weak today on macroeconomic concerns and with a guidance cut from Ryder capturing some attention. Investment firms have also chipped away at the airline and railroad sectors with downgrades and price target revisions.
- The move lower includes a wide variety of trucking, freight, and logistics stocks. FedEx (FDX -1.4%), Norfolk Southern (NSC -1.5%), CSX Corporation (CSX -1.7%), Knight Transportation (KNX -4.8%), J.B. Hunt Transport Services (JBHT -2.4%), Landstar System (LSTR -1.5%), Heartland Express (HTLD -2.7%), Air Transport Services Group (ATSG -1.6%), Allegiant Travel (ALGT -3.4%), Virgin America (VA -4.3%), and Hub Group (HUBG -2.9%) are all lower than broad market averages.
- The Dow Jones Transportation Average is off 1.76% vs. the S&P 500 -0.26%.
- Related ETFs: IYT, XTN.
Oct. 12, 2015, 5:43 PM
- Railroad stocks finished mostly lower after J.P. Morgan analyst Brian Ossenbeck cautioned investors not to assume the sector has bottomed ahead of Q3 earnings.
- Norfolk Southern (NYSE:NSC) ended -2.3% and was the biggest decliner among the Dow Jones Transports after Ossenbeck specifically named the company as "the one to avoid" after surging 11% in the two weeks ending last Friday.
- The analyst warns against "calling the bottom and buying the group solely on valuation," as his review of key end markets "still yields few green shoots while pressure on margins from negative mix is an emerging trend."
- Also, CSX -2.4%, GWR -2.1%, UNP -1.8%, KSU +0.1%.
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