Photography by Frederick Manfred Simon © www.SteelWheels.Photography
Inside This Issue
· Margins Derailed: Ohio Fiasco Slices $387m from NS Profits
· Recession Confession: CN Says We’re in One Right Now
· Economy Soft but Profits Aloft: For CN, Satisfaction Despite the Contraction
· Falcon Attack: UP/CN/FXE Strike Back
· Grain Shoots: Commodity Shipments Drive Sharp CPKC Revenue Gains
· Green Shoots? Not Yet for Intermodal; Rut Continues
· Pain in the Gas: Cheap Natural Gas Threatening Rail’s Coal Renaissance
· This Week: Fed Meets Again on Wednesday; April Jobs Report on Friday
Track Talk
“Our current volumes reflect that we are in a mild recession, and we’re uncertain about how deep or how long it will go on.”
-Canadian National CEO Tracy Robinson
Publisher’s Note: I’m pleased to share that I’ve just published a new book called American Places: A Profile of Local Economies Across the U.S. It’s not about railroads per se, but features plenty of railroad-themed content, including a look at the economy of North Platte, Nebraska, home to Union Pacific’s giant Bailey Yard. Click on the link to read a sample!
The Latest
· In a busy week of first quarter financial reporting, Norfolk Southern disclosed a big hit to earnings from costs associated with its East Palestine derailment fiasco. The railroad still made lots of money, as North American Class I railroads always do these days. But operating ratio swelled to nearly 80%. NS insists, however, that the game plan it detailed at its December investor day meeting remains (pun intended) on track. Canadian National, for its part, was again near the top of the heap in terms of industry profitability, trailing only CSX for O.R. last quarter. Counterintuitively, CN’s margins rose y/y despite what it says is a mild recession already underway. The new CPKC performed well too, lifted by impressive revenue strength. CP and KCS still produced separate financial statements for Q1 (the merger was formally concluded on April 14th). CP’s standalone accounts showed the industry’s sharpest y/y improvement in Q1 operating margin—Canada’s bountiful autumn grain harvest played a big role in that. All three railroads—NS, CN, and CPKC—shared their thoughts on a variety of hot topics, like the depressed intermodal market and when it might revive. They discussed the sustainability of coal’s recent strength, the boost carriers are getting from rising auto production, and so on (see below for more detail).
Keep reading with a 7-day free trial
Subscribe to Railroad Weekly to keep reading this post and get 7 days of free access to the full post archives.