RailAmerica, Inc. has reported third-quarter 2009 earnings from continuing operations of $3.5 million compared to $2.0 million for the third quarter of 2008. Third-quarter 2009 net income, which includes discontinued operations, was $3.5 million, compared to $2.9 million for the third quarter of 2008.
The company reported a third-quarter 2009 operating ratio of 76.7% vs. 81.5% last year.
John Giles, RailAmerica’s President and Chief Executive Officer, commented: "In the third quarter, we posted solid financia lresults generating adjusted EBITDA of $37.6 million, down 4% compared to the record third quarter of 2008 and up 7% compared to the second quarter of 2009. With the completion of the initial public offering in October, we have a strong balance sheet with approximately $130 million of cash and are well positioned to make strategic investments that will complement the opportunities we have to grow organically through freight and non-freight revenue growth and further productivity gains."
RailAmerica, Inc. operates of 40 railroads with approximately 7,500 miles of track in 27 U.S. states and three Canadian provinces.
The Association of American Railroads reported that freight rail carloadings were down 15.3% in October compared with the same month last year. But "while U.S. rail intermodal traffic remained down 11.2% in October compared with the same month last year, there continued to be incremental month-to-month gains--up 4% from September 2009," said the AAR.
The association said coal traffic was down by 92,764 carloads, a factor in October's drop that "likely was the result of a cooler-than-normal summer that has led to larger-than-normal utility coal stockpiles." However, grain was up 1% as a weaker U.S. dollar lifted grain exports. (The U.S. Department of Agriculture reported that grain deliveries by rail to ports surged in October.)
"October's intermodal numbers, along with the recently-announced increase in GDP for the third quarter, indicate that we are seeing some hope for improvement in the nation's economic situation," said AAR Senior Vice President of Policy and Economics John Gray. "While it is still too early to say we are on the road to recovery, railroads continue to take freight cars out of storage with over 11,000 cars back in service in October."
New Providence, N.J.-based Axion International Holdings, Inc. has announced that it has won a $957,000 contract from the U. S. Army for construction of two railroad bridges from nearly 100% recycled plastics.
The bridges will be built at Fort Eustis, Va., home of the Army Transportation Corps, with main structural components made entirely from recycled consumer and industrial plastics.
Axion said the new bridges will have rating capacities of 130 tons, "a new milestone in thermoplastic load bearing capacity, surpassing the current record held by Axion’s bridges at Fort Bragg, N. C., which are able to support loads over 73 tons for tracked vehicles and 88 tons for wheeled vehicles."
Austin, Tex.’s Capital Metropolitan Transportation Authority says it will begin testing its Stadler diesel multiple-unit (DMU) cars (previously categorized by the agency as diesel light rail transit, or DLRT) as early as next week. CapMetro has tested the equipment over its 32-mile rail route throughout 2009 primarily during morning hours, even as its opening date has been repeatedly delayed, but this marks the first testing during afternoons.
Trains will be running on simulated schedules comparable to what CapMetro will use when service begins sometime in 2010, with a March target the current plan.
"MetroRail will be traveling at full operating speeds, nearly twice as fast as freight trains," CapMetro said in a news release. "Additionally, train activity will increase significantly. For these reasons, motorists, cyclists, and pedestrians are encouraged to always expect a train, and to stay off the tracks."
MetroRail's route crosses about 70 streets, highways, and private drives. CapMetro has installed crossing gates at almost all crossings, including quad gates in some locations, but has had difficulties with operational timing throughout the year, contributing to the delay in commencing service.
Munich, Germany-based Knorr-Bremse Thursday said it has signed an agreement with the Chinese Ministry of Railways to equip 2,720 new cars for the Chinese CRH3 high speed train with braking and door systems. Of these, 1,280 cars will also be fitted with air-conditioning systems from Knorr-Bremse. The company valued the agreement at approximately $744 million, making it “the largest order that Knorr-Bremse has ever won,” the company said.
Knorr-Bremse’s local subsidiaries will work with Chinese joint-venture partners on the order, targeted for completion by 2012.
"This order represents an exceptional success story and provides further confirmation that Knorr-Bremse's strategic approach in China is on track," said Dr. Dieter Wilhelm, chairman of the Rail Vehicle Systems division.
The company credits its long-term presence in China, beginning in the 1970s, as one reason for its success. Knorr-Bremse has its own production facility in Suzhou, thereby meeting Chinese local-content requirements. The company also maintains a development center staffed by about 45 engineers, and has concluded a technology transfer agreement with the Locomotive and Car Research Institute at the Chinese Academy of Railway Sciences. Knorr-Bremse Rail Vehicle Systems has a workforce of roughly 1,400 employees in China.
Lake Oswego, Ore.-based Greenbrier Cos. Inc. Thursday reported that its fiscal fourth-quarter net profit fell 9.3% to $6.7 million, or 37 cents a share, from $7.4 million, or 45 cents a share, a year earlier. Earnings for the quarter included a tax benefit of 37 cents a share as well as severance costs, write-offs, and other charges of 14 cents a share.
Revenue for the quarter fell 36% to $230.4 million, but earnings per share beat analyst estimates predicting a loss of one cent a share for the quarter, based on projected revenue of $246.3 million.
The company said new railcar deliveries of 900 units were one-half of the year-ago amount, and noted it still is in negotiations with Fairfield, Conn.-based General Electric Co., which seeks to scale back or cancel deliveries under a long-term contract. Roughly 85% of the Greenbrier’s order backlog is subject to the GE order.
For the full fiscal year, the company reported a net loss of $54.1 million, or $3.21 per diluted share, vs. prior year’s net earnings of $19.5 million, or $1.19 per diluted share. Revenue of $1.0 billion was down 21% from the previous year, “reflecting the impact of the economic recession on all business segments,” the company said.
Greenbrier President and CEO William A. Furman hailed the improvement logged during the fourth quarter, saying, “Stronger performance in our Manufacturing and Leasing & Services segments and a favorable tax rate led to a sequential improvement in our quarterly operating results. Our diversification efforts continue to pay off and reduce the effects of the economic downturn.
“Yet the markets in which we operate remain challenging,” Furman said. “For example, year-to-date rail loadings in North America are down about 18%, and a significant portion of the entire North American railcar fleet remains idle. In this environment, we continue to scale our operations and control costs, manage the company for cash flow and liquidity, and prudently deploy capital. During the quarter, we paid down net debt by an additional $35 million.”
Just after noon Thursday, shares of Greenbrier were up almost 3.6% in trading on the New York Stock Exchange.
G.I. Jobs magazine has named four Class I freight railroads among the 10 “most military friendly” employers, selecting Union Pacific as No. 1 among the top employers of military personnel, followed by CSX, BNSF, and Norfolk Southern.
“The nation’s freight railroads maintain a strong commitment to the men and women who serve our country,” said Edward R. Hamberger, president and CEO of the Association of American Railroads, in a Veterans Day message. “We’re proud tha twe can provide steady, good-paying jobs to America’s veterans. It’s a win-win. Veterans are highly skilled and possess maturity, discipline, and a strong work ethic.”
Hamberger said G.I. Jobs took note of the fact that while Union Pacific slowed its overall hiring over the past year due to the weak economy, the company still developed a new military task team to spearhead its military recruiting efforts.
Onein five CSX employees has served in the military. Currently, more than 100 BNSF employees are serving on active duty and more than 1,000 have been called to active duty since Sept. 11, 2001. Norfolk Southern actively recruits potential hires with military backgrounds and in 2009, military veterans comprised 10.1% of new hires.
New Jersey Transit said Tuesday it will advance a “cost-effective” maintenance program instead of overhauling its diesel locomotive fleet, authorizing $3.4 million (plus a 5% contingency) to a program to detect problems using customized diagnostic tools, and tapping an Alstom subsidiary for the task.
NJT in 2008 entered into a contract with Alstom Transportation Inc. Train Line Services (TLS), based in Naperville, Ill., to develop technical specifications for overhauling GP-40 and F-40 series locomotives, “and to develop and implement a formal Condition-Based Maintenance (CBM) program for the entire diesel locomotive fleet, which includes the Alstom-manufactured PL42AC.”
NJT committed $3.5 million to this task, with the $3.4 million approved Tuesday bringing its overall authorization to roughly $6.9 million. NJT says its fleet includes 105 PL42AC, GP040, and F-40 series locomotives, many of them more than 20 years old.
Alstom/TLS performed “a teardown and re-build of two NJ Transit locomotives” to evaluate the fleet’s condition and determined that “complete overhauls of the diesel fleet are not necessary,” NJT said in an agenda statement Tuesday. In response, NJT approved a contract amendment authorizing Alstom/TLS “to extend support services for a period of one year in order to give NJ Transit staff the necessary time to prepare a Request for Proposal fo ra three-year Condition-Based Maintenance program, while allowing the current program to continue uninterrupted.”
Said Rich Sarles, NJ Transit’s executive director, “You can address the problem before you have a breakdown” under the new program. Full rehabilitation could cost the agency about $3 million per locomotive, Sarles said. NJT expects to fund the program through the state’s Transportation Trust Fund.
A majority of Montgomery County Council officials in Maryland Tuesday endorsed a second light rail transit proposal for the Corridor Cities Transitway from Shady Grove to Clarksburg, opting for LRT over a Bus Rapid Transit alternative.
The LRT plan is part of a transportation package to improve transport flow along I-270 in the county, which lies northwest of Washington, D.C. It includes widening the Interstate north of Route 124 from its current three-lane capacity in each direction.
Still unclear is what Maryland state officials will do to support or thwart the county’s endorsement of LRT. The LRT component of the the Corridor Cities Transitway would have to compete for federal funding with two other proposals: the Metrorail Purple Line, linking Bethesda and New Carrollton, in neighboring Prince George's County, in a circumferential route connecting with Washington’s Metro rapid rail system, and the Baltimore east-west Red Line.
The council’s support of LRT put it in synch with other local officials, including County Executive Isiah Leggett, and also with many local business leaders, who see more potential from economic developmentthrough an LRT alternative.
Still, the council’s support for LRT may be lukewarm; several supporters of light rail on the council said Tuesday that if state officials chose bus rapid transit for the Corridor Cities Transitway, they would not vigorously protest.
Grassroots support for LRT may be a decisive factor; council staff had recommended BRT as “cheaper” (a point contested by numerous LRT advocates nationwide), but some council members said they feared a political uproar in northern Montgomery if they backed bus over rail.
"I have not had a lot of conversation with folks who want to get on a bus, no matter what you call it, whether it is a pretty bus or not," said one member, Michael Knapp. He said his constituents expect light rail.
Plans by Omaha, Neb.-based Berkshire Hathaway, Inc. to purchase BNSF Corp. in its entirety have spurred a rally among Chinese rail-related stocks, including transportation and construction firms. A number of companies have benefited from the rally, including Daqin Railway Co., China Railway Tielong Container Logistics, Guangshen Railway, and Good Hand Railway. Railway construction companies such as China Railway Construction Corp. (CRCC), China Railway Group, and China Railway Erju Co. also have seen their stock prices rise.
Revenue at these railway construction firms has been growing steadily thanks to the massive stimulus allocated to the infrastructure sector by the government. CRCC's orders surged by 80% in the third quarter and its revenue has been forecast to grow by 21.5% this year, according to a research note by Guosen Securities.
U.S. firms hope to capitalize on the vote of confidence, as well. Earlier this week, Sunnyvale, Calif.-based Trimble Navigation, Ltd. and the China Railway Eryuan Engineering Group Co. (CREEC) announced a definitive agreement to form a 50-50 joint venture in China. The joint venture will be based in Chengdu, China, where CREEC is headquartered. The deal still requires regulatory approval from the Chinese government.
Despite the encouraging signs, industry analysts said that the fundamentals did not fully justify a rally. Said Qiu Bo, an industry analyst at Guosen Securities, "The next two years will only see mild growth in railway construction."