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Aug. 7, 2015, 5:54 PM
- Rail traffic fell in July from a year ago as an increase in container volumes could not offset a sharp decline in oil and coal shipments, according to the latest monthly report from the Association of American Railroads.
- The number of carloads carrying oil and petroleum products fell 13.6% Y/Y to 67.9K last month, while coal volumes sank 12.5%; container shipments rose 3.8% to 1.2M, and traffic overall fell 1.8% to 2.7M.
- "Railroads are overexposed, relative to the economy in general, to the energy sector,” the AAR says in its traffic report.
- Relevant tickers: CSX, NSC, UNP, KSU, BRK.A, BRK.B
Jul. 23, 2015, 5:58 PM
- Union Pacific (NYSE:UNP) fell 5.7% in today's trade, becoming the latest rail company to suffer from sharp declines in coal traffic when it announced a nearly 10% Y/Y drop in Q2 revenues, including a 31% slump in coal revenues to $679M.
- The volume of coal carried in the quarter fell 26%, pushing overall volumes down 6%, UNP said.
- Last week, CSX, the main railroad in the eastern U.S., reported an 11% drop in Q2 coal revenues and a 15% decline in traffic.
- UNP, which operates in the western two-thirds of the U.S., suffered particularly heavily because its main coal traffic is low-quality coal from the Powder River Basin, which is used mainly for electricity generation; much of the coal traffic for CSX and Norfolk Southern (NYSE:NSC), which operate east of the Mississippi, is high-quality metallurgical coal used in steel production.
- UNP said its crude oil traffic for Q2 fell 29% to 25.2K carloads.
Jul. 22, 2015, 5:44 PM
- Orders for railroad tank cars during Q2 fell 29% Q/Q and 70% Y/Y, reflecting a broad decline in energy shipments at railroads.
- Carload volume for oil and petroleum products for the week ended July 18 was down 20% from last year and off 2.7% in the first 28 weeks of 2015 from the same period in 2014.
- Kansas City Southern (NYSE:KSU) recently reported a 46% decline in energy shipments, and Canadian Pacific (NYSE:CP) said Q2 revenue from crude oil shipping tumbled 29% Q/Q.
- Other relevant tickers: CSX, NSC, UNP, CNI, BRK.A, BRK.B, GBX, WAB, TRN, ARII, RAIL
Jul. 15, 2015, 3:59 PM
- CSX Corp. (CSX +1%) warns that declining coal shipments will continue to weigh on its results into next year as more power plants convert to use natural gas, a trend that resulted in a 5.6% drop in Q2 revenue.
- In today's earnings conference call, CSX executives said coal volumes fell 11% during Q2 and forecast a steeper 15% decline of domestic coal shipments in Q3 that could be repeated in Q4.
- "There's probably more downside to the coal volume next year than there is upside," CSX CFO Fredrik Eliasson said on the call, adding that the current energy environment will make it hard for the company to achieve the high end of its 2015 profit forecast.
- CSX left its FY 2015 earnings outlook unchanged, targeting mid to high single-digit EPS growth, after reducing its forecast in April.
Jul. 14, 2015, 4:08 PM
- CSX Corporation (NYSE:CSX) reports it struck an all-time high operating ratio of 66.8% in Q2.
- Volume was down 1% during the period.
- The company was able to lower expenses by 9% to help offset the 6% drop in revenue.
- Guidance: CSX expects domestic coal revenue to fall 10% this year. Margins are seen rising as a full-year mid-60s operating ratio is targeted.
- CSX +3.37% after hours.
Jul. 14, 2015, 4:07 PM
- CSX (NYSE:CSX): Q2 EPS of $0.56 beats by $0.03.
- Revenue of $3.06B (-5.6% Y/Y) misses by $70M.
- Shares +2.93%.
Jul. 14, 2015, 9:29 AM
- Earnings season for the railroad sector launches tonight when CSX Corp. reports with expectations EPS will be flat compared to a year ago at $0.53.
- The company lowered its guidance in April to single-digit earnings growth for the full year in a shot heard across the sector.
- Freight traffic has been in decline due to lower shipments of crude oil, coal, and grains, although some analysts have forecast increased demand for consumer goods could help to offset trends in the energy market.
- Today's big miss in retail sales doesn't bode particularly well for that line of thought.
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI, WAB, TRN.
- CSX earnings preview
Jul. 13, 2015, 5:35 PM
Jul. 10, 2015, 10:48 AM
Jul. 8, 2015, 4:10 PM
- CSX (NYSE:CSX) declares $0.18/share quarterly dividend, in line with previous.
- Forward yield 2.26%
- Payable Sept. 15; for shareholders of record Aug. 31; ex-div Aug. 27.
Jun. 11, 2015, 5:49 PM
- CSX jumped 3% today amid continued railroad merger speculation as well as a 9.4% increase in the company’s intermodal cargo reported in yesterday’s weekly traffic update from the Association of American Railroads.
- "The bigger weight is around the speculation of the merger," Cowen's Matt Elkott told Bloomberg; once Canadian Pacific CEO Hunter Harrison mentioned a merger attempt last October, "it wasn't going to go away," the analyst said.
Jun. 3, 2015, 12:37 PM
- CSX (CSX +0.3%) says overall volume in Q2 is tracking slightly below last year's level.
- EPS growth is forecast to be flat to slightly up compared to last year.
- For the full year, CSX see EPS growth in the mid-to-high single digit range.
- Execs presented today at the Deutsche Bank Global Industrials & Basic Material Conference.
May 21, 2015, 5:15 PM
- The Association of American Railroads says crude oil carried by big U.S. railroads fell nearly 14% Q/Q to ~113K carloads as oil companies cut back domestic shipments.
- Industry execs have cautioned that lower oil prices could end up slowing volume growth this year because the low prices will not support Bakken Shale crude, which is more expensive to extract and ship than other oil.
- Although total rail cargo volumes have continued to come in below expectations, Morgan Stanley analysts say a rally in energy prices could help boost railroad stock prices.
- Relevant tickers: CSX, NSC, UNP, KSU, BRK.A, BRK.B
May 14, 2015, 10:04 AM
- Railroad stocks are tilting lower after Kansas City Southern pulls its 2015 guidance at an investor conference.
- Investors are taking a cautious approach to Union Pacific (UNP -0.3%), Genesee & Wyoming (GWR -2.2%), Norfolk Southern (NSC -0.6%), CSX Corporation (CSX -0.1%), Canadian National Railway (CNI -0.5%), and Canadian Pacific (CP -0.3%) off the warning from Kansas Southern.
- Safety concerns also continue to linger in the sector which is seen as a development that could put some pressure on spending and investments.
- Previously: Kansas City Southern -3% after pulling guidance
May 13, 2015, 11:24 AM
- The U.S. oil industry is challenging new rules aimed at improving the safety of moving crude oil by rail, as the American Petroleum Institute petitions the U.S. Court of Appeals for the D.C. Circuit to block key provisions of rules unveiled earlier this month.
- The petition seeks to block a requirement that older tank cars be retrofitted with new safety features designed to prevent them from spilling oil or rupturing in a derailment, and challenges a requirement that tank cars be equipped with new electronic braking systems or face operational restrictions.
- Environmental groups say the new rules do not go far enough, and are considering their own legal challenge.
- Relevant tickers: CSX, NSC, UNP, CNI, CP, KSU, BRK.A, BRK.B, GBX, WAB, TRN, ARII, RAIL
May 5, 2015, 5:43 PM
- Norfolk Southern (NYSE:NSC) CEO Wick Moorman says the rail industry will challenge the U.S. government’s new crude-by-rail regulations, worried that the new rules could make shipping crude oil by train prohibitively expensive.
- The Department of Transportation last Friday called for the installation of new braking systems on trains hauling more than 70 cars of crude oil by 2021, a requirement Moorman says took the rail industry by surprise.
- The CEO tells WSJ that the new rules place railroads in a difficult spot because railroads do not own the vast majority of tank cars and thus have no control over whether the costly new brakes are installed; also, the brake requirement is not a mandate for tank car owners, only railroads, he says.
- Moorman says he is sure the industry will challenge the new rules either in court or petition the DoT for reconsideration.
- Relevant tickers: CSX, UNP, CNI, CP, KSU, BRK.A, BRK.B, GBX, WAB, TRN, ARII, RAIL
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