Wimerding, Pa.-based railroad equipment supplier Wabtec Corp. said Thursday its third-quarter earnings fell 18%, due to a fall indemand for new freightcars. But its earnings of $27.3 million, or 57 cents per share, beat Wall Street analysts estimates of 56 cents per share.
Wabtec reported earnings of $33.2 million, or 68 cents per share, in the year-ago quarter. Revenue fell to $330.5 million compared with $396 million in the third quarter of 2008.
The company also updated its 2009 guidance, with revenue expected to be about 12% lower than 2008, and earnings per diluted share expected to be between $2.40 and $2.50. Previous estimates foresaw a 10% revenue decline, with earnings per share falling between $2.35 and $2.50.
In a statement, Wabtec President and CEO Albett J. Neupaver said, “Market conditions continued to be very difficult in the third quarter for our freight rail business, while the Transit Group remained stable. Even in this environment, we still improved margins and generated strong cash flow. We will continue to manage what we can in the short term, while remaining focused on our long-term strategies and growth opportunities, such as the acquisition of Unifin International.”
Kansas City Southern Thursday reported third-quarter revenue of $386.1 million, down 21.4% from the $491.5 million in the third quarter of 2008. But KCS noted that every commodity group recorded higher revenue on a sequential basis from the second quarter, reflecting a gradually improving business environment; KCS 3Q revenue was up 13% from the previous quarter, with carloadings up 12% over the same time period.
KCS net income of $25.8 million, or $0.27 per diluted share, for the third quarter was down from $48.9 million, or $0.52 per share, in the third quarter of 2008.
As business starts to return to the railroads, more freight cars and locomotives are being put back to work, though the size of the stored fleet remains too large for comfort.
Norfolk Southern's executive vice president and chief operating officer, Mark Manion, told analysts in a conference call Tuesday that while "a significant potion of our fleet remains in storage due to continued weak volume levels ... we have reduced the number of cars stored from the peak of over 35,000 cars in July to over 22,000 cars at the end of September."
Manion said the railroad has reduced the number of locomotives stored from 700 in May to about 350.
Groupe Eurotunnel SA may bid for the high speed trainline running from the Channel Tunnel to London, Chief Executive Officer Jacques Gounon said in a radio interview on France’s BFM radio station.
Groupe Eurotunnel is in discussions with possible financial partners for a bid for a long-term concession to operate the rail line, Gounon said. The cost of the concession is estimated to be $2.5 billion, and possibly 30% higher.
Paris-based Groupe Eurotunnel holds the concession to operate Channel Tunnel, as well as terminals in Folkestone in the United Kingdom and Coquelles in France, and railcars that transport cars and trucks.
Sponsors of “Joint Rail Conference-2010: High-Speed and Intercity Passenger Rail” have issued a call for papers for presentation at the event, April 27-29, 2010, at the University of Illinois at Urbana-Champaign, Urbana, Ill. Abstracts for such papers are sought by Saturday, Nov. 14.
JRC 2010 is a cooperative effort of ASME, IEEE, ASCE, AREMA and TRB. JRC 2010 Chair Chris Barkan, professor of Railway Engineering at the university, says the event will be the principal, multi-disciplinary, North American conference focused on rail transportation for the year.
Papers and presentations are being solicited on various aspects of railroad civil, mechanical, electrical, and systems engineering, as well as rail safety, planning, design, financing, operations, and management. JRC 2010 will encompass issues involving both freight and passenger rail, but the conference theme will be HSR and other forms of developing intercity passenger rail.
Though any topic can qualify for submission, the conference is encouraging papers on some specific topics, including: railroad infrastructure engineering; rail equipment engineering; HSR experience and development; shared corridors; planning, management, and operation; and safety, security, and environment.
Abstracts, due Nov. 14, should be submitted to JRC 2010 at http://ict.illinois.edu/railroad/JRC/callforpapers-jrc.asp.
Another New York Metropolitan Area transit agency has embarked on resignaling its rail rapid transit system with CBTC (communications-based train control), with Siemens as the prime supplier.
Norfolk Southern reported Tuesday third-quarter net income of $303 million, or 81 cents per diluted share, down almost 42% from $520 million, or $1.37 per diluted share, in the comparable third quarter of 2008. Revenue of $2.1 billion fell 29% from year-ago levels, which NS attributed primarily to a 20% falloff in traffic volume and fuel-related revenue. However, NS’s railway operating expenses for the quarter were $1.5 billion, a decrease of 25% over the same period of 2008. Its railway operating ratio was 72.8%, compared with 69.1% during the third quarter of 2008.
“While our third-quarter results reflect the continuing weak economy, they also show Norfolk Southern's resilience and the strength of our franchise," said Norfolk Southern CEO Wick Moorman. “By controlling costs and maintaining service levels, we are managing through this economic downturn and will emerge an even stronger company.”
NS’s results drew positive comments from some Wall Street analysts. “NS’s favorable outlook with respect to key pillars of our Attractive Industry View is likely to stabilize and support rail shares,” said Morgan Stanley & Co. Inc.'s William Greene, Adam Longson, and John Godyn. “In contrast to the relatively less favorable outlook issued by the Western rails, NS management commentary was positive on both pricing and volume trends in addition to expected productivity gains.”
In early afternoon trading Wednesday on the New York Stock Exchange, shares of Norfolk Southern were up roughly $1.00, or more than 2%.
Canadian Pacific Railway earned a third-quarter profit of $195 million, up 14% from 2008, the railroad announced Tuesday. Diluted earnings per share were $1.16, an increase of 5% (All figures are in Canadian dollars.)
CP said foreign exchange gains and losses on long-term debt and other after-tax items, including the sale of two large properties, had an impact on earnings of $0.31. Excluding these items, adjusted diluted earnings per share were $0.85, handily beating the Wall Street consensus estimate of 78 cents.
“We delivered strong cost control and tight resource management this quarter while traffic volumes remained under pressure,” said Fred Green, President and CEO. “We are continuing to refine and optimize our business processes to further drive structural cost improvements. This increases our flexibility and positions us well to respond to changes in volumes as the economy begins to recover.”
Said Dahlman Rose & Co. Director-Equity Research and Railway Age Contributing Editor Jason Seidl, “Canadian Pacific has demonstrated an ability to keep costs down and improve operating efficiencies. While it seems unlikely that a significant upturn in volumes will follow the ongoing stabilization in the near term, CP is well positioned to further improve its bottom line results by continuing its cost control and service enhancement strategies.”
CP said that in the third quarter and the first nine months of 2009, the results of the Dakota, Minnesota & Eastern are consolidated with CP’s results; however, for the same periods in 2008 DM&E earnings were reported as equity income on one line of the income statement. In order to aid in the evaluation of the underlying earnings trends, 2008 results have also been presented on a pro forma basis, which is a non-GAAP measure. Financial data presented on a pro forma basis, redistributes DM&E’s operating results from an equity income basis of accounting to a line-by-line consolidation of DM&E revenues and expenses.
Maryland Transit Administration Police plan to begin aprogram of random security checks at MARC train stations this Friday, usingbomb-sniffing dogs to screen passengers' luggage and packages to detectexplosives. Administration officials warned riders that delays could occur andurged passengers to allow extra time to board trains on the MARC’s Penn, Camden,and Brunswick lines.
Lt. Col. John E. Gavrilis, chief of the MTA police, said thetighter security was not a response to a specific threat but part of a generaleffort to "target-harden" Maryland transit facilities. The effortcould be extended to Baltimore’s Metro and light rail stations in the future. Gavrilis said the MTAhas been working with the federal Transportation Security Administration todesign the program and noted the agency has received a federal grant to hirepersonnel and to purchase equipment needed for the screenings.
Screenings could involve luggage, packages, or othercarry-on items. Police will rotate the random screenings among the variousstations in the MARC system.