October 25, 2014

Class I railroads report 2nd quarter earnings

CSX_logoCSX Corporation announced record second quarter results with earnings coming in at $529 million or $0.53 per share. The second quarter of 2013 only saw $521 million or $0.51 per share.

Revenue increased this quarter by seven percent to an all-time record of $3.2 billion. On the same token, the railroad saw record operating income of nearly $1 billion and an operating ratio of 69.3 percent.

“To propel service and capture growth opportunities, CSX is adding front-line personnel and making targeted investments in infrastructure and freight cars to efficiently grow our business and create competitive advantages for our customers,” CEO, Chairman and President Michael J. Ward said.

Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.

 

cp-logo-240Canadian Pacific Railway announced that the 2nd quarter of 2014 delivered the strongest financial results in the company’s history. The company reported a net income of C$371 million or C$2.11 per diluted share, a 48 percent improvement over the same quarter of last year. The second quarter of last year only saw C$252 million or C$1.43 per share.

Total revenues for CP saw an increase of 12 percent over last year to C$1,681 million. On the same token, operating expenses saw a two percent increase to C$1,094 million. Operating income came in at a 40 percent increase to C$587 million. Operating ratio saw a 680 basis point improvement to 65.1 percent.

“CP delivered another record quarter,” CEO E. Hunter Harrison said. “The team has made great strides in my two years at CP and they continue to demonstrate resiliency by delivering these results despite continued operational challenges in the US Midwest after a devastating winter. The future is very promising for the railroad as we transition towards leveraging our lower cost structure and improved service.”

 

KCS_rail_logoKansas City Southern reports record revenues of $650 million for the second quarter of 2014, an increase of 12 percent over the same quarter for last year. The railroad also saw a seven percent increase in carloads.

KCS announced an operating income of $206 million, or an adjusted operating income of $214 million excluding lease termination costs. According to the railroad, this is a 20 percent hike over last year’s operating income. On the same token, operating ratio came in at 68.3 percent or an adjusted operating ratio of 67 percent, a 2.0-point improvement over last year’s second quarter. Diluted earnings per share were at $1.21, a 26 percent increase over the second quarter of 2013.

“During the second quarter of 2014, KCS experienced strong revenue growth from the shipment of grain and automotive,” CEO and President David L. Starling said. “KCS’ core carload franchise continues to show strength in line with the general economy, while the energy commodity group declined due to reduced shipments of utility coal.

“We are optimistic about our business in the second half of the year, but we again remind investors that grain growth rates will decline from the first half of 2014, reflecting the improved grain shipments in the second half of 2013. Therefore, we maintain our 2014 goals outlined to investors in January.”

 

CN_red_logoCanadian National Railway reported a net income of C$847 million or C$1.03 per diluted share for the second quarter of 2014, an 18 percent increase over last year. The same quarter of last year only saw a net income of C$717 million or C$0.84 per diluted share.

CN saw an increase of 21 percent in operating income to C$1,258 million, while revenues also increased 17 percent to C$3,116 million. Revenue ton-miles increased by 14 percent and carloads also increased 11 percent.

Operating ratio improved for the railway by 1.3 points to 59.6 percent this quarter from 60.9 percent from the second quarter of 2013.

“CN recovered swiftly from the first-quarter winter weather challenges – just as our customers would expect us to do – thanks to solid execution by our dedicated team of railroaders,” President and CEO Claude Mongeau said. “CN delivered record volumes in the quarter by bringing its key supply chains back into sync and taking advantage of continued strength in several of our core markets. This solid operational recovery underscores our ability to accommodate growth at low incremental cost and to drive very strong financial results.”

 

ns_LogoNorfolk Southern Railroad announced record second-quarter 2014 financial results. The railroad reports a record net income of $562 million, 21 percent higher than the $465 million reported for the second quarter of 2013.

NS reported a nine percent increase in operating revenues to $3 billion. Income from railway operations also increased 22 percent to $1 billion. Diluted earnings per share came in at a record $1.79, a 23 percent increase over the $1.46 that was recorded for last year’s second quarter. Operating ratio for the railroad saw an improvement of five percent to 66.5 percent.

“Norfolk Southern delivered excellent financial performance during the second quarter, reporting the highest railway operating revenues in its history,” CEO Wick Moorman said. “We see continued strength across most of our business segments and are optimistic that overall economic conditions will drive growth. Our focus remains unchanged. We are committed to running the safest railroad, providing superior service, increasing efficiency and driving superior returns to our shareholders.”

 

union_pacific_logoUnion Pacific announced all-time record earnings for the second quarter of 2014. The railroad reports a 21 percent increase in net income to $1.3 billion or $1.43 per diluted share for the quarter, over last year’s $1.1 billion or $1.18 per diluted share for the same quarter.

Operating revenues for UP totaled $6 billion, up 10 percent from the same quarter last year. Operating income is up 17 percent to $2.2 billion, while operating ratio saw an improvement of 2.2 points to 63.5 percent.

“Union Pacific achieved record quarterly financial results, leveraging the strengths of our diverse franchise to handle strong demand in the face of challenging operating conditions,” CEO Jack Koraleski said. “We are optimistic about the second half of the year. As always, we are closely monitoring the economic landscape, along with the major drivers across all of our business segments, including the potential impact of weather on grain and coal.”