American Railcar Industries, Inc. Wednesday reported a second-quarter 2010 net loss of $5.9 million, or 28 cents per share, on revenue of $61.2 million, compared with net earnings of $1.1 million, or 5 cents per share, on revenue of $109.9 million in the year-ago quarter.
ARI attributed the revenue decline “primarily due to lower railcar shipments and a change in product mix. The decrease was partially offset by increased railcar repair volumes primarily due to the company’s completed railcar repair facility expansions and the utilization of its railcar manufacturing facilities for railcar repair projects.”
ARI said it “shipped approximately 370 railcars [in the second quarter] as compared to approximately 980 railcars in the same period of 2009. Our backlog increased to approximately 1,210 railcars as of June 30, 2010.”
“The railcar industry has begun to see a modest improvement in demand during 2010,” said ARI President and CEO James Cowan. “Railcar orders have improved, railcar loadings have increased, and railcars are being returned to service from storage. We received orders for approximately 1,080 railcars during the second quarter of 2010. To fulfill the new railcar orders we will begin modestly ramping up production rates. Our railcar services segment continues to be strong, with revenues growing 25% year-over-year, to $34.6 million for the six months ended June 30, 2010. This growth resulted from higher volumes driven by repair plant expansions and repair work performed at our railcar manufacturing plants.”
“From an order standpoint, the 1,080 railcars booked represents the best quarter since 2Q07, and more cars were ordered in 2Q10 than in the prior 10 quarters combined,” commented Steve Barger, director, Industrial Manufacturers, for KeyBanc CapitalMarkets, Inc., in a note.
ARI said its net loss for the six months ended June 30, 2010 was affected by lower operating earnings, an increase in netinterest expense, and increased losses from joint ventures, all partially offset by a decrease in selling, administrative, and other costs.
In its second-quarter 2010 report, Trinity Industries, Inc. said its Rail Group had revenue of $112.9 million and an operating loss of $2.7 million. This compares to revenue of $303.3 million and a loss of $328.7 million in the second quarter of 2009, which included a $325 million pre-tax goodwill impairment charge.
TrinityRail’s order backlog grew to approximately 3,990 railcars valued at around $300 million on June 30, compared with a backlog of 2,980 cars valued at $250 million of March 31.
TrinityRail delivered approximately 890 railcars and received orders for approximately 1,900 during the second quarter.
TILC had approximately 50,970 cars in its fleet as of June 30, 2010. This compares to a fleet of approximately 50,350 cars on March 31. TILC’s lease fleet utilization rose to 98.7% as of June 30, 2010, compared to 98.3% as of March 31, 2010.
On a corporate basis, Trinity Industries reported net income attributable to stockholders of $18.4 million for the second quarter ended of 2010. The second quarter of 2009 had a loss of $209.4 million. Excluding the goodwill impairment charge, income was $33.9 million.
In a note, Steve Barger, director, Industrial Manufacturers, for KeyBanc Capital Markets, Inc., observed, “Overall, we consider this a solid quarter in what continues to be a tough environment, and we believe investors should be encouraged by the consistency of TRN’s performance over recent quarters.
Jacskonville, Fla.-based RailAmerica, Inc. reported late Wednesday that its second-quarter 2010 revenue increased 18% to $117.3 million from $99.7 million. With carloads up 11%, freight revenue increased 17% to $96.5 million. Non-freight revenue rose 22% to $20.8 million.
Including charges totaling $8.5 million after tax, or $0.15 per share, for the early retirement of debt and interest rate swap termination costs, RailAmerica reported a second-quarter 2010 loss from continuing operations of $4.6 million, or $0.08 per diluted share.
John Giles, RailAmerica’s president and CEO, said: “During the second quarter, we made progress on each of our strategic priorities of organic growth, balance sheet strength, and external growth. Our solid operating performance was driven by significantly higher revenue and further improvements in our underlying cost structure. Despite higher fuel prices, operating income was up 20% versus a year ago excluding theimpact of 45G tax credit monetization recognized in the second quarter of 2009. Late in the second quarter of 2010 we redeemed an additional $74 million of our senior notes, further strengthening our balance sheet. With the acquisition of Atlas Railroad Construction Company early in the third quarter, we expanded our presence in growing rail-related markets.”
September 18-21, 2011, marks the dates for Railway Interchange 2011, as Minneapolis hosts the first North American event combining the technical conferences of AREMA (American Railway Engineering and Maintenance-of-Way Association) and CMA (Coordinated Mechanical Associations), as well as the exhibits of RSI (Railway Supply Institute), REMSA (Railway Engineering & Maintenance Suppliers Association), and RSSI (Railway Systems Suppliers, Inc.).
Thousands of rail industry customers and representatives are expected to attend what promises to be the largest ever such event held in North America. RI 2011 will include nearly 300,000 square feet of combined, indoor exhibit display space and more than 1.5 miles of combined, outdoor, on-, and off-track exhibits. Technical presentations by AREMA and CMA (Coordinated Mechanical Associations) will explore relevant railway topics. “This unprecedented rail industry event will provide railroaders from around the world a unique opportunity to see and hear all that is new and innovative across the entire rail supply industry,” said Dr. Charles Emely, executive director/CEO of AREMA.
“Our members look forward to this unique conference and trade show,” said David Soule, REMSA executive director.
“This combined effort will produce the best trade show and technical sessions at the best location in North America,” said Tom Simpson, RSI executive director.
“RSSI supports this unprecedented way for the supply organizations to join forces to create a one-of-a-kind venue,” said D.F. "Bucky" Remaley, RSSI executive director and secretary-treasurer.
RI 2011’s technical sessions and indoor exhibition will be held at the Minneapolis Convention Center, 1301 2nd Avenue South in Minneapolis. The outdoor exhibits will be held 20 minutes northwest of the Convention Center at Canadian Pacific's Humboldt Yard, located at 2625 49th Ave N. in Minneapolis. Bus transportation will be provided between the Minneapolis Convention Center and Humboldt Yard. Exhibit booth sales opened July 1, according to REMSA’s Soule, and RSI’s Simpson is urging potential exhibitors to reserve quickly for the best space availability. To exhibit at Railway Interchange 2011, companies must be amember in good standing of REMSA, RSI, or RSSI to exhibit in their sections, RSSI’s Remaley stated.
More information is available online at www.railwayinterchange.org. Beginningin January 2011, registration for Railway Interchange 2011 will be available online at the same site. There is a separate fee to attend technical sessions.
The National Transportation Safety Board has determined that contributing factors to last year’s fatal collision of two Washington Metropolitan Area Transit Authority trains were “the lack of a safety culture within WMATA; ineffective safety oversight by the WMATA Board of Directors and the Tri-State Oversight Committee; and the Federal Transit Administration's lack of statutory authority to provide federal safety oversight.”
“Additionally,” said the board in a report released Tuesday, “WMATA’s failure to replace or retrofit the 1000-Series railcars, after these cars were shown in previous accidents to exhibit poor crashworthiness, contributed to the severity of passenger injuries and the number of fatalities.”
The board found that the specific cause was a “failure of the track circuit modules that caused the automatic train control (ATC) system to lose detection of one train, allowing a second train to strike it from the rear.”
The NTSB also cited WMATA for its “failure to ensure that a verification test developed after a 2005 incident near Rosslyn station was used system wide. This test would have identified the faulty track circuit before the accident."
The accident (pictured above) occurred on June 22, 2009, when train 112 struck stopped train 214 near the Fort Totten station. The lead car of 112 struck the rear car of 214, causing the rear car of train 214 to telescope about 63 feet into the lead car of train 112. Nine people aboard train 112 were killed as a result of the accident, including the train operator, and dozens were injured.
“The layers of safety deficiencies uncovered during the course of this investigation are troubling and reveal a systemic breakdown of safety management at all levels,” said Chairman Deborah A.P. Hersman. “Our hope is that the lessons learned from this accident will be not only a catalyst for change at WMATA, but also the cornerstone of a greater effort to establish a federal role in oversight and safety standards for rail transit systems across the nation.”
As a result of the investigation, the NTSB said it made recommendations to the U.S. Department of Transportation, the FTA, TOC, WMATA, Alstom Signaling, and transit authorities in six states using GRS Generation 2 modules. Issue areas included safety oversight, equipment, inspection and maintenance guidelines and procedures, and targeted equipment removal and replacement.
The New York Metropolitan Transportation Authority’s 2011 Preliminary Budget, released Wednesday, proposes fare andtoll increases of 7.5% effective Jan. 1, for riders who use its trains, buses, bridges, and tunnels. It says this level is in line with an agreement with the governor and state legislature in May 2009 as part of an MTA rescue package.
MTA said the planned increase follows “unprecedented internal cost-cutting initiatives undertaken in response to a $900 million shortfall for 2010 resulting from cuts to State assistance and dramatic downturns in tax revenue.”
MTA stressed that the deficit battle is far from won. The agency released a proposed Four-Year Financial Plan for 2011-2014 that reflects anticipated shortfalls amounting to more than $2.5 billion over the plan period.
One of the Plan's assumptions is that “all employees—both represented and non-represented—would receive a net-zero wage increase for two years.” It also includes another 7.5% increase in fares and tolls in 2013.
“The foundation of this Plan is the most aggressive and comprehensive overhaul in the history of the MTA,” said Jay H. Walder, Chairman and CEO of the MTA (pictured at right). “These actions have allowed us to hold true to our commitment regarding fare increases while maintaining the quantity and quality of service that New Yorkers rely on every day.”
Trainyard Tech, LLC says it has signed a contract with Indiana Harbor Belt Railroad Co. to install the CLASSMASTER™ process control system at Blue Island Yard in Hammond, Ind.
CLASSMASTER™ is built using commercial off-the-shelf products running on the Microsoft Windows XP platform, the company says, allowing a move away from proprietary components and allowing for flexibility and ease of installation and maintenance. Wonderware InTouch is used to provide an easy-to-use, intuitive HMI interface.
Highlights of the CLASSMASTER™ system include: auto calibration; DTC; easily readable loggers; graphic playback; realtime hump list display; eBlock™ electronic track blocking; automatic report generation; NX route control, AEI Integration; PCS system and I/O redundancy; hot standby operation; wireless maintenance PC tablet; remote diagnostics and maintenance; and locomotive speed control. Automatic calibration delivers the highest levels of accuracy quickly. User-friendly data storage and reporting is as detailed as requested, displayed graphically, pictorially, or historically. A lifetime warranty on Trainyard Tech application software accompanies all projects.
The company says the installation at Blue Island Yard is the 14th CLASSMASTER™ system to be installed since its creation in 2003.
Solid earnings in a shaky economy is one reason. The emerging picture of a growth industry is another.
Canadian Pacific second-quarter net increased 97% to C$166.6 million (US$161 million) compared with the second quarter of 2009. Diluted earnings per share were 98 Canadian cents, up 23% from C$0.80 in the 2009 period. Analysts had expected a per-share profit of 83 Canadian cents.
“We leveraged volume growth in the quarter to deliver a solid financial performance through a keen focus on cost management,” said President and CEO Fred Green.
Total revenue was up 20% to C$1.23 billion; operating income increased 48% to C$274.1 million; and the operating ratio improved 430 basis points to 77.8%.
“Markets are likely to remain volatile [but] our proven track record of quickly adjusting our resources to meet changing volume demands position us well for the second half,” said Green.
Norfolk Southern Corp. Tuesday reported second-quarter 2010 net income of $392 million, up 59% from the $247 million posted for second-quarter 2009. The railroad’s operating ratio fell five percentage points to 69.8%, a second-quarter record, from 74.8% during second-quarter 2009.
Diluted earnings per share were $1.04., beating the Wall Street estimate of 99 cents.
“This is our fourth straight quarter of volume growth, and we are optimistic about continued year-over-year increases in rail traffic,” said CEO Wick Moorman (pictured at left).
Second-quarter railway operating revenue increased 31% to $2.4 billion from the second quarter of 2009, primarily as the result of a 22% increase in traffic volume.
General merchandise revenue was $1.3 billion, up 31%. Coal revenue increased 36% to $696 million, and intermodal revenue reached $451 million, 23% higher compared with the second quarter of 2009.
Railway operating expenses were $1.7 billion, up 22%, mainly due to higher compensation and benefits, and fuel expenses. Income from railway operations improved 57% to $733 million.