CSX Corp. late Tuesday said its fourth-quarter earnings were up 23% compared with the same quarter a year ago, with earnings per share of 77 cents beating Wall Street analyst estimates by one cent. But analysts also acknowledged special circumstances for that gain and expressed some disappointment in the railroad’s slumping volume, attributed primarily to weak demand for coal.
Jacksonville, Fla.-based CSX last year sold its famed Greenbrier Hotel located in West Virginia; excluding that action of one year ago, CSX earnings from operations fell 16%.
Morgan Stanley analysts William Greene and Adam Longson commented: “CSX's 4Q09 operating income shortfall vs. consensus and tepid views on both coal (likely to remain depressed through 2010) and domestic intermodal (pricing pressure continues) are likely to fuel bearish sentiment around rails.”
Green and Longson added, “Though CSX reported a headline beat of $0.77 vs. consensus of $0.76, consistent with our model, an unexpected tax benefit of $15 million accounted for ~$0.04 of the result. In fact, CSX missed our operating income forecast by $30 million or $0.05 per share with lower than expected revenue (other revenue in particular) driving much of the miss, offset slightly by better than expected operating costs. In the earnings release, management set a marginally bearish tone by specifically noting that they expect utility coal demand to remain weak well into 2010 and that competitive truck pricing continued to weigh on domestic intermodal yields.”
They concluded: “Looking forward, we see high likelihood of a pullback during the 4Q09 earnings season; however, we expect such an event will prove to be a buying opportunity, as it was during 3Q09 earnings, if it occurs. Long-term, we reiterate our Attractive View on rails as a result of growth driven by (1) pricing power, (2) productivity improvements, and (3) rebounding volumes.”
Said CSX Chairman, President, and CEO Michael Ward in a statement, "The economy continued to show modest, sequential improvement in the quarter.” He added, “CSX worked aggressively on gaining operating leverage and further strengthening the fundamentals of our business for the future."
The consortium, led by the Siemens Mobility Division, includes Invensys Rail Corp. (formerly Safetran Systems) and D/A Builders, LLC, a joint venture of Daidone Electric of Newark, N.J. and Aldridge Electric of Libertyville, Ill. The CBTC system will be radio-based, using WLAN (Wireless Local Area Network). The project is due to be completed in 2017.
Siemens said CBTC will increase PATH’s passenger capacity from 240,000 per day to 290,000, by shortening headways. PATH’snew PA-5 cars, supplied by Kawasaki Railcar USA, are “CBTC ready” and are now being placed into service. “Upgrading the system to CBTC will shorten the distance between operating trains, enabling more trains to move into and out of New York City on the basis of the existing infrastructure,” said Siemens. “CBTC will also enhance the system's throughput to meet future peak time demands, inaddition to increasing safety and reliability while reducing ongoing maintenance costs. In addition to this increase in capacity, a new Siemens-provided train supervision system will help PATH operate more efficiently and know exactly where each train is located in the rail network.”
The PATH rail system is more than 100 years old, running from both Newark and Hoboken in New Jersey to the World Trade Center and Herald Square in Manhattan.
Electro-Motive Diesel, Inc. announced Tuesday that it is constructing a rebuild facility for traction motors and other electrical equipment in San Luis Potosi, Mexico.
“This new traction motor rebuilding facility will be the best in North America,” said John S. Hamilton, president and CEO of Electro-Motive Diesel. “With nearly 24,000 EMD locomotives in operation throughout North America, the San Luis Potosi operation will be uniquely positioned to enhance the reliability of every one of them.”
The city of San Luis Potosi is the capital and most populous city in its namesake state, and lies at the crossroads of distribution, commercialization, and import-export activities between its cities, borders and ports. EMD considers the city one of the most important railway centers in Mexico, due both to the number of rail-oriented workshops and the combined length of installed track.
New proof of the railroad industry's investor appeal came Tuesday with the report that the Dow Jones Railroad Index has improved around 76% since its low point in March 2009, easily exceeding the 50% gain posted during the same time by the Dow Jones Industrial Average.
The comparison appears in a chart published in the Wall Street Journal, a Dow Jones newspaper, and it comes with a note of caution: While "the improving economy likely helped railroad companies deliver better fourth-quarter results ... there's been a recent slowdown in rail demand."
CSX will report is third-quarter results Wednesday, and the Thompson Reuters analyst poll expects the railroad to post its third consecutive quarterly increase in earnings.
One of Portland TriMet’s new substations, located at Southwest Jackson, between Fifth and Sixth avenues, is designed to tap solar and wind power for much of its operation.
The $1.2 million substation, expected to begin operating next month, will be completed by this fall. Roughly $1 million is funded though federal renewable energy project funds. From all sources, the substation is designed to power about one-third of the Portland mall light rail route, recently converted from a bus mall.
"This is something we've never really done," TriMet architect Bob Hastings said. "It's the first of its kind anywhere on a transit system."
A 50-kilowatt solar array will cost $750,000, while complementary wind turbines are estimated to cost about $250,000. The two elements will be paid for with public funding, energy tax credits, and a renewable energy fund financed by Portland General Electric. Combined, the solar and wind sources are expected to produce 75% to 90% of the power needed; excess energy will be sold back to Portland General Electric.
Amtrak's second daily round trip launched last summer between Seattle and Vancouver, British Columbia, has attracted enough passengers to bolster its chances of continuation following the Winter Olympics, which Vancouver will host next month.
The second frequency, supported in part by the state of Washington, has averaged 67 riders per train, above the 60 per train anticipated by the Washington Department of Transportation.
WashDOT will decide whether or not to continue the service based not only on post-Olympics ridership, but also depending on whether it and Canada’s Border Services Agency can agree on how to cover the costs of passenger clearance at the U.S.-Canada border. At present, Canada has agreed not to seek coverage of the cost, which it says amounts to $1,500 per day.
Washington State maintains that highway users and air travelers aren’t expected to cover such costs, and making Amtrak passengers do so reflects a modal bias.
The Montreal, Maine and Atlantic Railway, currently operating about 750 miles of rail line in Maine, Vermont, Quebec, and New Brunswick, continues preparing to abandon about 230 miles of route between Millinocket and Houlton, Maine, the latter just west of the U.S.-Canada border.
MMA President and CEO Robert Grindrod says the biggest problem is a steep decline in demand for forest products, spurring the move to discontinue service. “I would say it’s been in decline for some time, and the recession of 2009 made it substiantially worse,”he said. “The principle traffic on the line we're seeking to abandon is lumber and other forest products and I would say that demand for those products have been in decline in the Maine market, that is, Maine origins to other locations, since about the second half of 2006."
MMA initiated the abandonment filing last August, but expressed hope that either another short line might acquire the route, possibly with funding assistance from the state of Maine. "We are looking and talking actively with the state of Maine. They are the only other party that has contacted us thus far," said Grindrod.
Maine reportedly has applied for federal TIGER grants to fund the purchase of the rail line. But MMA Board Chair Ed Burkhardt says the number of applications makes it less likely that such funding will be available, given that Maine itself hasn’t made any purchase of the line a priority.
“I think this is pretty vital that rail service be kept to the majority of Aroostook County, but they didn't prioritize this, so the chance of getting the stimulus money isn't good," said Burkhardt.
During the “Great Recession,” the railroads have been ableto retain their pricing power, though at a reduced level. As business begins to pick up, there are strong indications that this momentum will continue, a new shipper survey says.
According to Dahlman Rose & Company’s fourth-quarte r2009 Rail Shipper Survey, railroad shippers “anticipate an average base rate increase of 3.8% over the next six to 12 months. Current expectations are modestly above the 3.2% expected increase in our 3Q09 Shipper Survey and are above where they were a year ago at 3.5%. While the railroads have been able to maintain greater pricing power throughout the recession than their trucking counterparts, railroad pricing expectations did fall fairly significantly from pre-recession levels of 5-6%. Indeed, our recent surveys show that shippers’ expectations for rate increases have stayed under 4% since their steep fall in 4Q08."
Adding to Dahlman Rose’s generally upbeat analysis, rate case actions should not pose a major threat in 2010: "According to our 4Q09 survey, 96% of shippers indicated that they did not plan to file any rateaction against a railroad over the next 12 months. This is largely inline with the 98% and 94% results in our 3Q09 and 2Q09 surveys and higher than the 88% reported in our 1Q09 survey. This suggests that shippers feel pricing will come in on its own or that current pricing practices are not egregious.”
The hope for a recovery is more pronounced,” said DahlmanRose. “Shippers expect their respective businesses to grow approximately 6.3% over the next 12 months vs. 3Q09, 2Q09, and 1Q09 survey responses of 5.9%, 4%, and 1% respectively. We believe this optimism is largely driven by the modest improvement in the economy in the fourth quarter and the widespread belief that the worst is behind us. In order of magnitude, the outlook for metals, petroleum products, chemicals, building products, and transportation showed improvement over 3Q09, while expectations from forest products, consumer goods, and agricultural products shippers declined slightly.”
days on the job, New York Metropolitan Transportation Authority Chairman and
CEO Jay H. Walder wonders if MTA really needs 92 different phone numbers for
customer information and six calling centers.Does an agency running a $400
million deficit really need to pay $550 million a year in overtime? Is it smart
to spend 15 cents to collect and process every dollar collected in fares?
just few areas in need of attention that Walder identified in a report, “Making
Every Dollar Count,” that he released to mark his first three months in office.
Walder acknowledged that much has been done by his predecessors to tackle the
bureaucratic inefficiencies that persist at MTA and to
deliver better service to customers. But a streamlined,
and cost-effective approach to operating the nation’s largest public transportation
agency remains a distant goal.
that distance will be a little more difficult than Walder first thought.
started in October, I expected this report to talk about plans for finally
starting to catch up with the rest of the world, and it does,” said Walder.
"But I barely had my feet on the ground when the state’s economic crisis
hit the MTA hard. It’s clear that my first priority right now must be
to attack the
MTA’s cost structure and ensure we are using every dollar effectively. At the
same time, we must find affordable ways to improve service for customers who have
been waiting far too long.”
Here are some
of the things Walder has in mind:
• “In 2010, Customer Information Signs
will be activated in 75
stations. In 2011, this same information system will be operational at all of
the stations on the 1-6 subway lines.
• “By the end of 2010, we plan to test
bus arrival information
several vendors, to enable rollout of a system beginning in mid-2011.
• “By March 2010, next commuter train
information will be available “on line”—via smart phone and web—for service to
and from all LIRR and main line Metro-North stations.
• “We are moving forward with plans to
that allows all motorists to pay tolls without stopping at the Henry Hudson
• “In 2010, the MTA, New Jersey Transit
and the Port Authority of New York and New Jersey, in partnership with
MasterCard, will pilot new technology that will eliminate the need to swipe a
farecard, will cost less to operate and eventually will provide subway, bus and
commuter rail customers with other benefits, including faster bus boarding,
regional interconnectivity, and the ability to select among unlimited ride and pay-per-ride
options via the web and telephone.”
report is available, along with a video, on the MTA's new website at