third quarter 2020

Q3 rail recap: The good and not so good

A photograph of a train passing by a rail crossing.

With the railroads’ third-quarter earnings releases over and done, it’s time to take a look at who the “winners” and “laggards” were in Q3.

For commodities, the answer might be looking at North American rail volumes in the third quarter. Grain is one obvious “winner.” U.S. grain volumes were up 27.8% in September and 25.5% in October, according to the Association of American Railroads, while Canadian Pacific (NYSE: CP) and CN (NYSE: CNI) reported record grain movements over the last several...

https://s29755.pcdn.co/news/q3-rail-recap-the-good-and-not-so-good

FreightCar America justifies production move to Mexico

A photograph of a railcar in a yard.

The COVID-19 pandemic, high number of railcars in storage and low rail volumes hastened FreightCar America’s (NASDAQ: RAIL) decision to move all of its railcar production to Mexico.

In September, FreightCar America said it would close its Shoals facility in Alabama and move all of its railcar production to the Castaños facility in Mexico by 2021. It had previously taken part in a 50-50 joint venture (JV) for the facility but it acquired the other 50% from the JV partner this fall, meaning that...

https://s29755.pcdn.co/news/freightcar-america-justifies-production-move-to-mexico

Coal, petroleum and sand drive BNSF’s operating revenues lower

A photograph of a BNSF train passing by a desert mountain.

Slumping revenues for coal and energy products put pressure on BNSF’s (NYSE: BRK) profits in the third quarter, according to parent company Berkshire Hathaway.

Third-quarter operating revenue was $5 billion, down 14.1% compared with the third quarter of 2019, as rail volumes continued to be negatively impacted by the pandemic, Berkshire Hathaway said this weekend. 

Pretax earnings in the third quarter were $1.8 billion, down 8.4% from the same period a year ago.

Looking at operating revenues,...

https://www.freightwaves.com/news/coal-petroleum-and-sand-drive-bnsfs-operating-revenues-lower

FleetCor tops revenue estimates, misses on earnings

FleetCor Technologies Inc. (NYSE: FLT) announced Thursday third-quarter net income of $188.8 million, or $2.19 per share, a 16% year-over-year decline compared to 2019.

The Atlanta-based commercial fuel-card and business-payment systems provider also posted third-quarter revenue of $585.3 million, a decrease of 14% compared to 2019. 

FleetCor’s third-quarter revenue topped most Wall Street expectations for revenue at $580.8 million, while its earnings per share missed expectations by 46 cents. 

The...

https://s29755.pcdn.co/news/fleetcor-tops-estimates-on-revenue

Norfolk Southern strives to ramp up efficiency

A photograph of a Norfolk Southern train traveling through a snowy landscape.

Norfolk Southern (NYSE: NSC) will be closing “several” yards in Atlanta, and it will cease humping operations at its Macon, Georgia, yard as part of a wider plan to ramp up network efficiency.

The changes, which will occur next week, will “enable us to rework many of our Southeastern intermodal flows for improved service, lower cost and additional growth capacity,” said Norfolk Southern (NS) Chief Operating Officer Cindy Sanborn during the company’s third-quarter earnings call on Wednesday.

After...

https://www.freightwaves.com/news/norfolk-southern-strives-to-ramp-up-efficiency

Coal puts pressure on Norfolk Southern’s third-quarter revenue

A photograph of a Norfolk Southern train traveling through a forest.

Coal chiseled away at Norfolk Southern’s (NYSE: NSC) operating revenue for the third quarter of 2020, with a 38% decline in coal revenue dragging overall revenue down by 12%.

Operating revenue was $2.5 billion for the quarter, compared with $2.8 billion in the third quarter of 2019. Of that, coal revenue was $250 million, compared with $403 million a year ago.

Meanwhile, merchandise revenue was nearly $1.6 billion, down 10% from $1.7 billion in the third quarter of 2019. Intermodal revenue fell...

https://www.freightwaves.com/news/coal-puts-pressure-on-norfolk-southerns-third-quarter-revenue

Union Pacific seeks to sweat its assets

A photograph of a Union Pacific train crossing a desert field.

With rail volumes expected to improve year-over-year in the fourth quarter and into 2021, Union Pacific (NYSE:UNP) will seek to fine-tune its deployment of precision scheduled railroading (PSR) by continuing to focus on asset productivity. This includes taking measures such as lengthening trains farther and speeding up the network.

UP expects “positive year-over-year growth” in the fourth quarter. Coupled with positive volumes in the first quarter, the company expects full-year volumes to be...

https://www.freightwaves.com/news/union-pacific-seeks-to-sweat-its-assets

Trinity Industries pinpoints focus on rail

A photograph of a tank car parked in a rail yard.

Railcar lessor and rail product manufacturer Trinity Industries (NYSE: TRN) will focus exclusively on servicing the rail industry as the company seeks to shore up its financial well-being.

The change comes as the company abruptly ended its trucking business earlier this month. Trinity also ended a logistics business.

Trinity has three goals for its new strategic framework to lower its financial breakeven point. Those goals are to optimize its railcar lease fleet, reduce the impact of cyclicality...

https://www.freightwaves.com/news/trinity-industries-pinpoints-focus-on-rail

CSX looking to take advantage of tight truck capacity

A photograph of a CSX train traveling by a forest.

With precision scheduled railroading firmly in place after nearly four years, CSX (NASDAQ: CSX) is seeking to gain more market share through short-term and long-term opportunities, in part because of how the railroad addressed capacity needs in the third quarter.

“If you’d had this kind of traffic surge across the rail network in North America four, five years ago, we would be now talking about gridlock across all the major cities in the country and we wouldn’t be doing anything,” said CSX...

https://s29755.pcdn.co/news/csx-looking-to-take-advantage-of-tight-truck-capacity

Union Pacific sets all-time quarterly record for operating ratio

A photograph of a Union Pacific train traveling through a grassy field.

Union Pacific (NYSE: UNP) eked out an all-time quarterly record operating ratio (OR) in the third quarter despite a 11% drop in operating revenue.

Union Pacific’s (UP) OR was 58.7% for the quarter, compared with 59.5% in the third quarter of 2019, amid lower fuel prices. 

Investors sometimes use OR, which is operating expenses as a percentage of revenue, to gauge the financial health of a company. A lower OR implies improved financial health.

Meanwhile, net income was $1.4 billion, or $2.01 per...

https://s29755.pcdn.co/news/union-pacific-sets-all-time-quarterly-record-for-operating-ratio

+ More