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Mar. 10, 2015, 7:25 PM
- Canada and the U.S. are "very close" to announcing stronger new oil tanker rail car standards, intended to limit fires and pollution when oil trains derail, Canadian Transport Minister Lisa Raitt says.
- A recent spate of fiery oil tanker accidents, including three derailments in just the past month from Canadian National Railway (NYSE:CNI), has ratcheted up the pressure on both governments to take action.
- Raitt is recommending that Canada's House of Commons transport committee summon CNI to explain its recent accidents.
- Meanwhile, officials from large rail operators met with White House staff last week to argue against the need for electronically controlled pneumatic brakes, saying they would be costly and not add significant safety benefits.
- Other relevant tickers: CP, CSX, UNP, KSU, NSC, GWR, BRK.A, BRK.B, GBX, TRN, ARII, RAIL, WAB
Mar. 4, 2015, 12:57 PM
- CSX (CSX -0.3%) says it expects its domestic coal shipments will decline at least 5% this year, though it still expects to record strong Q1 earnings growth and double-digit earnings growth for 2015.
- Coal shipments are a major part of the business of railroad operators; for CSX, coal represented ~18% of the company's total freight volume and ~22% of its revenue for 2014.
- CSX also sees more moderate growth in shipments of crude oil than expected previously; crude shipments are a smaller portion of rail shipments - less than 2% at CSX - but have been one of the fastest growing parts of the rail industry.
- CSX estimates that last month's crude oil train derailment in West Virginia will knock a penny or two off Q1 EPS; it also estimates overall freight volume will increase 3% for the quarter.
Mar. 2, 2015, 7:35 PM
- The crude oil aboard the train that derailed and exploded two weeks ago in West Virginia contained so much combustible gas that it would have been barred from rail transport under safety regulations set to go into effect next month, WSJ reports.
- The oil’s vapor pressure was 13.9 psi, which exceeds the limit of 13.7 psi that North Dakota is set to impose in April on oil moving by truck or rail from the Bakken Shale.
- Plains All American Pipeline (NYSE:PAA), which shipped the oil, says it follows regulations governing the shipping and testing of crude; CSX, the railroad that carried the oil, says it had stepped up its inspections of the track along the route.
- The new information about the West Virginia accident likely will increase regulators’ focus on the makeup of oil being shipped by train; oil from sahle formations is known to contain far more combustible gas than traditional crude oil, which has a vapor pressure of ~6 psi.
- Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
Feb. 23, 2015, 5:57 PM
- The Canadian National Railway (NYSE:CNI) train that recently derailed in Ontario, igniting and spilling more than 6K barrels of oil, was traveling at a restricted speed and carrying oil in structurally enhanced tank cars, Canadian investigators say.
- The initial findings suggest strong similarities to a CSX oil train derailment that occurred days later in West Virginia, and likely will add to concerns that recent regulatory steps to make the transport of oil by rail do not go far enough.
- Both trains derailed while traveling well below speed limits recently imposed on trains carrying crude oil, and both were pulling CPC-1232 tanker cars introduced in 2011 to be a safer replacement for an older generation that had been criticized as inadequate.
Feb. 23, 2015, 6:50 AM
Feb. 17, 2015, 12:59 PM
- Fires from a CSX (CSX -1%) train carrying crude oil that derailed along a river in West Virginia continue to burn, as state officials attempt to determine whether downstream drinking water systems have been affected.
- A CSX spokesman says the fires are being allowed to burn out on their own; the cause of the cause of the accident, which occurred during a winter storm and amid frigid temperatures, is under investigation.
- State officials initially said at least one tanker car had fallen into the Kanawha River, but that no longer appears to be the case.
- It was the second significant oil train incident in three days following a Canadian National Railways (CNI +0.7%) train from Alberta's oil sands that derailed in Ontario on Saturday; the accident blocked the main railway between Montreal and Winnipeg.
Feb. 16, 2015, 10:21 PM
- A CSX train carrying more than 100 tankers of crude oil has derailed and burst into a huge fireball in West Virginia, igniting at least 14 tankers.
- At least one tanker car and perhaps more fell into the Kanawha River, prompting concerns about potential contamination of water treatment facilities that serve area communities; residents within a half mile of the scene, in Mount Carbon, were told to evacuate until further notice.
- One person was being treated for potential inhalation issues, but no other injuries were reported, according to CSX.
Feb. 11, 2015, 11:33 AM
- CSX (NYSE:CSX) declares $0.16/share quarterly dividend, in line with previous.
- Forward yield 1.77%
- Payable March 13; for shareholders of record Feb. 27; ex-div Feb. 25.
Feb. 2, 2015, 9:54 AM
- Demand on railroads to transport crude oil on long trains is on the decline as an oversupply of tank cars and lower production in the energy industry both play a factor.
- Data highlighted by Reuters suggests lease rates for oil rail cars declined to $1,300 near the end of last month after being as high as $2,450 close to a year ago.
- The number of long trains specializing in crude that are sidelined due to inactivity has increased, according to market watchers.
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI, WAB, TRN.
Jan. 15, 2015, 6:50 PM
- Shipments of crude oil by rail may be on the decline, but Credit Suisse analysts say that does not hurt the bull case for railroads as the best way to play industrial stocks amid plunging crude prices.
- For all the hype about shipping crude by rail, railroads can still rely on other lines of business, such as transporting general merchandise, the firm says; what's more, capacity is tight, with or without oil.
- Credit Suisse says its three top picks in the group - Canadian Pacific Railway (NYSE:CP), CSX and Union Pacific (NYSE:UNP) - offer an averager 20% upside for their stock prices in the next 12 months.
- CP and UNP are the railroads with the highest exposure to shale oil, with a respective 9.5% and 7.5% of revenues from crude and related products, the firm says; Kansas City Southern (NYSE:KSU) has the least exposure to shale oil, with 3.6% of its revenue tied to oil transport.
Jan. 14, 2015, 7:35 PM
- Crude oil could fall as low as $35/bbl before it might affect the amount of oil flowing out of the Bakken Shale to the east coast, CSX executives said during today's earnings conference call.
- CEO Michael Ward says crude-by-rail represents less than 2% of CSX's total business, but the ~3.5 trains/day used in the transport of crude should stay steady and grow a bit through 2015; he says CSX's business of transporting fracking sand to natural gas drilling areas also should be unaffected.
- Despite falling diesel prices falling, which has made road transport pricing more competitive with rail, CSX execs expect this year it will again gain market share from its highway-bound competition, adding that customers had not expressed any interest in switching.
- In its 2015 outlook, CSX said it expects double-digit EPS growth as merchandise and intermodal volumes grow at a faster pace than the economy and as it increases prices for its services.
Jan. 13, 2015, 4:48 PM
- CSX (NYSE:CSX) says it saw strong growth rates for coal, intermodal, and merchandise in Q4.
- The quarter was strong enough to propel CSX to all-time annual revenue mark of $12.7B.
- Operating ratio +140 bps to 71.8% in Q4.
- Guidance: CSX expects double-digit EPS and margin expansion in 2015.
- CSX +1.01% after-hours.
- Previously: CSX EPS in-line, beats on revenue
Jan. 13, 2015, 4:03 PM
- CSX (NYSE:CSX): Q4 EPS of $0.49 in-line.
- Revenue of $3.2B (+5.6% Y/Y) beats by $20M.
- Shares +0.9%.
Jan. 13, 2015, 8:19 AM
- A positive outlook on the railroad sector is issued by Cowen Research after a Q4 survey.
- The investment firm notes that the drop in crude shipments in the sector is being offset by pent-up demand in other commodities and capacity pressure in other transportation modes.
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI, WAB, TRN.
Jan. 12, 2015, 5:35 PM
Dec. 8, 2014, 3:20 PM
- Another tough day for railroad stocks as oil prices slide again.
- There's been some brave talk that the railroad sector has already seen the developments in the oil industry factored into share prices, but today's action indicates concerns on crude transport is still a concern.
- Decliners: Canadian Pacific (NYSE:CP) -5.5%, Canadian National Railway (NYSE:CNI) -1.7%, Genesee & Wyoming (NYSE:GWR) -2.9%, Kansas City Southern (NYSE:KSU) -2.7%, Union Pacific (NYSE:UNP) -3.1%, CSX Corporation (NYSE:CSX) -2.8%, Norfolk Southern (NYSE:NSC) -3.5%, Pioneer Railcorp (OTCPK:PRRR) -4.3%.
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