Thursday, January 21, 2010

US Rail Freight Figures Down As Predicted

CSX and Union Pacific Announce True to Form Results
Shipping News Feature

US – As was foretold here on the 12th January the fourth quarter results for the two American rail freight giants were no better than anticipated. It is still likely that the sector will slowly recover, and indeed take a larger slice of business from the trucking community, but such events cannot happen overnight. North America still has a lot more investment to make in its rail freight and inter modal infrastructure before shipping via rail cars becomes preferable to trucks.

CSX revenue was around $2.3 billion which meant a fall of 13% against Q4 2008 with earnings against ongoing operations standing at just over $300 million reducing earnings per share to just $0.77, a fall of 16%.

Union Pacific saw an almost identical revenue decline of 13%, down to $3.75 billion from $4.29 billion and earnings drop about 17% from $660 to $550 million for the quarter compared to the previous year. This resulted in earnings of $1.08 per share, 23 cents down but better than other analysts had predicted.

With a Norfolk Southern conference call scheduled for the 27th of this month to announce their current figures and Warren Buffett expected to speak out at the Burlington Northern Santa Fe Corporation stockholders meeting in February many investors will be watching the US rail freight sector with interest.

Pic: A Norfolk Southern Double Stack Freighter at Work