Wed, Mar. 30, 1:48 PM
- Total U.S. carload traffic for the first 12 weeks of 2016 fell 6.2% Y/Y to 5,990,944 carloads, according to data from the Association of American Railroads.
- Intermodal containers and trailers traffic increased 2.2% to 3,085,831 units.
- U.S. rail traffic volume fell 13.7% to 2,905,113 carloads.
- Categories tied to energy markets have been a drag on demand this year.
- AAR weekly report
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI, WAB, TRN.
Fri, Mar. 11, 6:29 AM
- Canadian Pacific Railway (NYSE:CP) CEO Hunter Harrison is facing an uphill battle to convince CSX - not just Norfolk Southern (NYSE:NSC) - of the merits of a merger.
- "Neither one of them think they fit well with us. So I've got a selling job to do if we're going to make this successful," he told Bloomberg Television, confirming for the first time that CSX didn't welcome Canadian Pacific's overtures.
- Harrison has been aiming for an acquisition that would create a coast-to-coast railroad, eliminating rail-car exchanges between carriers.
Thu, Mar. 3, 12:52 PM
- Total U.S. carload traffic for January and February fell 13.5% Y/Y to 1,947,084 carloads, according to data from the Association of American Railroads.
- Intermodal containers and trailers traffic increased 8% to 2,088,747 units. The comparison was impacted by last year's West Coast port dispute.
- Total U.S. rail traffic volume in the United States was down 3.6% to 4,035,831 carloads and intermodal units.
- Categories showing strength in February included motor vehicles/parts and waste/nonferrous scrap. As expected, transport demand for coal and petroleum was weak.
- "After Saudi announcements on energy pricing late last week it is painfully evident that it will take a while for the shakeout in that sector to play itself out, " warns the AAR.
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI, WAB, TRN.
Wed, Mar. 2, 6:58 PM
- While a takeover of CSX is unlikely, Citi analyst Christian Wetherbee believes the railroad could be acquired for a price that values it in the "upper $30s" per share if a strategic buyer were to come forward.
- WSJ reported yesterday that Canadian Pacific Railway (NYSE:CP) offered to acquire CSX for "$20B plus" in late January and CSX rejected the offer, but CP remains interested in a deal.
- Wetherbee continues to believe CSX can fetch a takeover price equal to 11x EBITDA, but says his estimates for CSX have dropped since the previous time he estimated the company's value in a takeover scenario.
- The analyst has a $29 price target and Buy rating on CSX shares.
Tue, Mar. 1, 5:47 PM
- Shares in CSX (CSX +2.1%) are jumping, up 7.1% after hours, on a Dow Jones report that it rejected an overture from Canadian Pacific Railway (CP +1.5%) to talk takeover in January.
- CP pursued a difficult proxy battle for Norfolk Southern this winter, dropping that plan in early February after heavy opposition, but pursuing a long-shot bid to use a voting trust to complete a hostile takeover.
- Updated 6:09 p.m.: Canadian Pacific is still devoted to its pursuit of NSC (NSC +2.9%) as well as maintaining in interest in CSX, despite both pursuits being unwelcome. Both targets have an eastern U.S. stronghold that interests CP, which had also gone after CSX in 2014 (and failed then as well).
- Previously: Canadian Pacific goes extra mile in Norfolk merger effort (Feb. 16 2016)
- Previously: Norfolk Southern: More talks with CP 'not in best interest' (Feb. 09 2016)
- Previously: Report: Canadian Pacific to pull plug on proxy battle for Norfolk Southern (Feb. 09 2016)
Tue, Feb. 23, 9:09 AM
- Morgan Stanley downgrades Union Pacific (NYSE:UNP), CSX (NASDAQ:CSX), and Kansas City Southern (NYSE:KSU) to Equal Weight after having all three stocks lined up with Overweight ratings.
- Concerns on continued weakness with coal and energy transport volume is a major reason for the broad sector swipe, although MS does sees upside for Canadian National (NYSE:CNI) which is raised to Overweight from Equal Weight. Canadian National is a bit more diversified than some its peers.
- Previously: Genesee & Wyoming on watch after Morgan Stanley downgrades (Feb. 23 2016)
Mon, Feb. 22, 3:48 PM
- Shares of CSX (CSX +3%) and other railroad operators are higher after BofA Merrill issues a round of upgrades in the group, citing industry volume comparisons that will get easier in April.
- The firm thinks CSX should enjoy multiple expansion as coal pressures stabilize amid the return of intermodal growth and volume stabilization; BofA, which upgrades CSX to Buy from Neutral and hikes its price target to $28 from $25, sees productivity gains driving double-digit sustainable earnings growth longer-term and operational improvements to offset some inflation costs.
- In addition to upgrading CSX, BofA raises Union Pacific (UNP +2%), Knight Transportation (KNX +2.8%) and Swift Transport (SWFT +2.7%) to Buy from Neutral, and lifts Genesee & Wyoming (GWR +2.4%) and Werner Enterprises (WERN +1.1%) to Neutral from Underperform.
Mon, Feb. 22, 10:19 AM
- Shipping stocks are on the move after the large jump in crude oil prices eases some anxiety over demand.
- Notable gainers include Diana Shipping (DSX +12.1%), Navios Maritime Partners (NMM +6.5%), Frontline (FRO +6.6%), and Scorpo Bulkers (SALT +5.9%).
- The trucking sector is also ahead of broad market averages off the oil news. ArcBest (ARCB +4.4%), Swift Transportation (SWFT +1.6%), Celadon Group (CGI +2%), and Knight Transportation (KNX +2.6%) (also upgraded) are on the rise.
- Railroad industry players CSX (CSX +3.8%) and Genesee & Wyoming (GWR +3.7%) are up sharply.
- On the vehicle manufacturing/supplier side, solid gainers include Meritor (MTOR +6.7%), Dana Holding (DAN +2.7%), Westport Innovations (WPRT +3.9%), Oshkosh (OSK +3.8%), Navistar (NAV +5.4%), and PACCAR (PCAR +2.3%).
- The Detroit Three are all in rally mode as well. Ford (NYSE:F) and GM (NYSE:GM) are up 2%, while Fiat Chrysler Automobiles (NYSE:FCAU) is 3.3% higher.
- Previously: Oil prices rebound, WTI heads back above $30 (Feb. 22 2016)
Wed, Feb. 17, 9:45 AM
- CSX (NASDAQ:CSX) CFO Frank Lonegro presented today at the Barclays Industrial Select Conference.
- Lonegro says the company expects to see volume fall this year at at mid-high single digits rate.
- Earnings will take a significant hit in Q1 due to the volume drop and over $100M in unique items.
- CSX will target $200M in productivity savings this year and position itself to benefit when demand trends turn stronger, according to Lonegro.
- A long-term target to achieve an operating ratio in the mid-60s is backed.
Thu, Feb. 11, 9:10 AM
Tue, Jan. 26, 4:59 PM
- Berkshire Hathaway-owned BNSF Railway (BRK.A, BRK.B) says it plans to reduce capital spending for the first time in six years, as railroads seek to reduce costs amid a freight slump.
- BNSF says it will spend $4.3B in 2016, down 26% from a record $5.8B in 2015, on locomotives, rail cars, track and maintenance, after increasing investment steadily since 2010.
- BNSF joins Union Pacific (NYSE:UNP), CSX and Kansas City Southern (NYSE:KSU) in lowering spending amid a drop in carloads, led down by coal; UNP plans to spend $3.75B this year, down from $4.2B last year, CSX is paring $100M off last year’s $2.5B, and KSU plans to spend $580M-$590M vs. $649M last year.
Tue, Jan. 19, 5:58 PM
- Canadian Pacific Railway (NYSE:CP) files a complaint with the U.S. Department of Justice alleging some of its competitors have worked together to block its attempt to merge with Norfolk Southern (NYSE:NSC).
- "The fact that these major railroads have joined to work so feverishly against CP’s proposal speaks volumes about their concerns regarding the impact the transaction would have on their competitive positions,” CP says in its letter to the DoJ.
- Union Pacific (NYSE:UNP), for one, disputes the allegation, saying “We have communicated with other railroads for the purpose of petitioning the government. We oppose this merger, and we are prepared to discuss our views with the government."
- Related tickers: CSX, BRK.A, BRK.B
Fri, Jan. 15, 5:45 PM
- The U.S. Federal Railroad Administration expects to scrutinize the "significant safety hurdles” that would result from merging any of the major U.S. railroads, the head of the agency tells WSJ, a move that could place another obstacle in the way of Canadian Pacific’s (NYSE:CP) takeover attempt for Norfolk Southern (NYSE:NSC).
- The FRA is not empowered to block railroad mergers, which require approval by the Surface Transportation Board, but it can work with railroads on a “safety integration plan" to ensure safe operations in the case of a merger under largely untested rules put in place in 2001.
- Shippers have been filing letters with the STB to oppose a CP-NSC merger, concerned about potential price increases and service problems; other railroads also oppose the merger, including CSX, Union Pacific (NYSE:UNP) and BNSF (BRK.A, BRK.B).
Thu, Jan. 14, 6:31 PM
- CSX says it is planning a $272M intermodal rail terminal in North Carolina that it envisions as a major transportation hub to make the state’s ports more competitive.
- CSX says it is committed to spending $150M for the project, which would be located in the Raleigh area and depends on receiving $100M in state transportation funds.
- Shares rose 4% in today's trade, rebounding off a sharp loss yesterday following disappointing Q4 results, as BB&T upgraded CSX to Buy from Hold, saying shares are valued near their lowest forward multiple in years after dropping 28% in 2015 and another 10% since the start of the new year.
Wed, Jan. 13, 7:55 PM
- CSX is in a "freight recession," with rail cargo volumes at levels not seen outside a recession, CEO Michael Ward said in today's earnings conference call.
- CSX's forecast for lower freight volume suggests the overall U.S. economy may be slowing, and added to the gloom in today's broader trading session.
- Ward said CSX would cut ~$200M in expenses in 2016, reduce capital spending by $100M to $2.4B, and park some older, less-efficient locomotives that are not needed.
- Despite the rail industry’s current problems, mergers are not the solution, CSX execs said during the call, referring to Canadian Pacific’s (NYSE:CP) $30B bid for Norfolk Southern (NYSE:NSC); Ward said any merger would result in substantial regulatory costs, and any cost savings due to synergies would be extremely limited.
- CSX fell 5.7% in today's trade.
Wed, Jan. 13, 3:54 PM
- The transportation sector is down sharply across the board on broad macroeconomic concerns.
- Airline decliners include SkyWest (SKYW -6.9%), Spirit Airlines (SAVE -6.1%), United Continental (UAL -5.5%), Southwest Airlines (LUV -5.3%), and American Airlines (AAL -4.6%).
- Railroad movers include CSX (CSX -5.5%), Norfolk Southern (NSC -5.9%), Genesee & Wyoming (GWR -6.3%), Canadian Pacific (CP -5.6%), and Kansas City Southern (KSU -4.1%).
CSX Corp. is a transportation supplier company. It provides rail-based transportation services including traditional rail service and the transport of intermodal containers and trailers. The company through its principal operating subsidiary, CSX Transportation, Inc., provides an important link... More
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