MidRail LLC Chairman Gil Lamphere and Watco CEO Dan Smith are joining an expert panel sharing growth strategies at Railway Age’s Next-Gen Freight Rail 2021, to be held virtually March 10.
Cowen and Company
Despite a challenging market, backlog remains strong, Wabtec Corp. reported during its fourth-quarter and full-year 2020 earnings release.
As part of Cowen and Company’s “Energy Transition Series,” analysts spoke with The Hydrogen Council Executive Director Daryl Wilson to explore the adoption of hydrogen and fuel cell technologies—from stationary to mobility applications. Also addressed were use-cases relating to complementary battery technology and costs of hydrogen as a fuel source. Cowen analysts discussed, too, how Cummins and Wabtec are operating in this market.
Kansas City Southern reported Jan. 22 that fourth-quarter 2020 revenue fell 5% to $693.4 million vs. $729.5 million in the comparable 2019 quarter. This was based on lower volumes (3% decline) related to a 59-day service disruption at Lazaro Cardenas due to teachers’ protests; lower fuel surcharge; and fluctuations in foreign currency.
Rail shippers in fourth-quarter 2020 expected price increases of 3.2% (up 10bps sequentially), and their sub-group of railcar buyers raised order expectations modestly, according to two surveys conducted by Cowen and Company analysts Jason H. Seidl (Managing Director and Railway Age Wall Street Contributing Editor), Matt Elkott and Elliot Alper.
The Greenbrier Companies, Inc. (GBX), in its first fiscal quarter ended Nov. 30, 2020, reported a net loss of $10 million, attributable to the company, in what continues to be a “challenging market environment.” GBX noted it has been successful in maintaining cash flow and liquidity—“essential components” of its operating strategy—and its diversified $2.35 billion new railcar backlog of 23,900 units—including orders for 2,900 railcars in the quarter, valued at $260 million—“provides a baseload of activity as we gain greater visibility into customer needs as the year unfolds.”
2021 Freight Rail and Equipment Market Outlook, with David Nahass, Jason Seidl and Matt Elkott: RAIL GROUP ON AIR PODCAST
Railroad Financial Corp. President and Railway Age Financial Editor David Nahass; Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl; and Cowen and Company Transportation Equipment Analyst
At Cowen and Company, we are revising our transportation OEM and machinery earnings estimates for fourth-quarter 2020 and 2021, and introducing our 2022 estimates; updating our North American Class 8 production forecast; and fine-tuning our railcar supply demand model. What are we seeing? Gradually improving supply-side dynamics.
At Cowen and Company, we expect North American railcar demand to recover in 2021. One of the best-positioned suppliers? The Greenbrier Companies (GBX), with more than a 40% manufacturing share following the acquisition of ARI. Railcar markets in Europe and Brazil are also improving. All of this plus the cost-cutting measures GBX has taken make it our top 2021 pick.
We hosted rail industry experts in our third Suds with Seidl event. The overall mood was optimistic. The outlook for 2021 was strong, with one participant noting he was surprised to hear just how bullish his customers were this past week. Class I’s may be missing business opportunities, but there is still hope for greater communication via technology initiatives. We remain positive on the rail group.