24/7 Wall St. » ARII

Rail Car Maker Doubles EPS Estimate (RAIL, ARII, GBX, CSX, UNP, CP)

Paul Ausick — Tue, 08 May 2012 14:20:57 +0000

The past year has not been particularly kind to rail car makers. That may be changing, with FreightCar America Inc.’s (NASDAQ: RAIL) first quarter earnings report out this morning. Despite lower rail traffic due to a drop in coal shipments, FreightCar posted diluted EPS of $0.81 for the first quarter, more than double the consensus estimate of $0.39. Revenue also crushed expectations, coming in at $219.1 million versus an estimate of $170.6 million. But there are some headwinds.

American Railcar Industries Inc. (NASDAQ: ARII) also more than doubled EPS estimates for the quarter and Greenbriar Companies (NYSE: GBX) beat estimates by more than 25%. Railroads fared well too, though not with the same big move. CSX Corp. (NYSE: CSX) beat its EPS estimate by 13%, Union Pacific Corp. (NYSE: UNP) beat by about 10%, and Canadian Pacific Railway Ltd. (NYSE: CP) beat the consensus estimate by 5%.

FreightCar delivered about 3 times as many cars in the first quarter as it did in the same period a year ago. The not-so-good news is that orders fell significantly in the quarter, from 4,027 a year ago to 1,244 this year. Backlog is growing, though, from 5,206 a year ago to 6,934 this year.

Sequentially FreightCar’s backlog has dipped from 8,303 in December 2011 to 6,934 at the end of March. Orders need to pick up or the backlog will peter out in the not-so-distant future.

Rail traffic in April was down -5.5% year-over-year, and coal shipments were down -16.6%, the largest decrease on record according to the American Association of Railroads. The number of rail cars in storage now totals about 20% of the fleet, and the number has increased for five straight months.

FreightCar did not offer any guidance in today’s earnings report, but analysts are expecting EPS of $0.43 next quarter and full-year EPS of $1.88. Given today’s strong report those look like slam dunks. But there are a couple of reasons to be cautious here.

FreightCar’s shares are up about 3.7% in the first 45 minutes of trading, but the shares had traded up as much as 18% in the pre-market. The 52-week range is 12.82-$24.01.

Paul Ausick

Filed under: Earnings, Infrastructure, Transports Tagged: ARII, CP, CSX, featured, GBX, RAIL, UNP

24/7 Wall St. Closing Bell (TRP, DMD, ARII, CHK, KFT, DG, KALU, LDK, HUM, SNH, SOHU, ACI, ADM, RATE, BRCM, DPZ, ODP, PFE, SIRI, VLO, BKS, SUN, PAY)

Paul Ausick — Mon, 30 Apr 2012 20:13:01 +0000

The major US stock indexes opened slightly lower this morning and continued drifting lower all day. The Chicago PMI report got the day started on the wrong foot, showing a decline in spending even though personal income rose in March (our coverage here). Spain’s slip into recession did not help (our coverage here) and a report on global unemployment doesn’t offer much hope for economic expansion (our coverage here). The US dollar index rose slightly today, now up 0.05% at 78.780. The GSCI commodity index is up 0.35% at 684.45, with commodities mixed. Cocoa and orange juice posted sharp declines today. WTI crude oil closed down -0.1% at $104.87/barrel, and Brent crude trades down -0.24% at $119.54/barrel. Gold settled down less than -0.1% today, at $1,664.20/ounce, and an overall loss for the month of April of -0.5%.

The unofficial closing bells put the DJIA down nearly 15 points to 13,213.63 (-0.11%), the NASDAQ fell nearly 23 points (-0.74%) to 3,046.36, and the S&P 500 fell -0.39% or more than 5 points to 1,397.91.

There were several analyst upgrades and downgrades today, including Demand Media Inc. (NYSE: DMD) cut to ‘equal weight’ at Evercore; TransCanada Corp. (NYSE: TRP) cut to ‘hold’ at Desjardins; American Railcar Industries Inc. (NASDAQ: ARII) raised to ‘neutral’ at UBS; Chesapeake Energy Corp. (NYSE: CHK) raised to ‘outperform’ at BMO Capital; Kraft Foods Inc. (NYSE: KFT) raised to ‘overweight’ at JPMorgan; Dollar General Corp. (NYSE: DG) raised to ‘strong buy’ at Raymond James; and Kaiser Aluminum Corp. (NASDAQ: KALU) raised to ‘buy’ at Dahlman Rose.

Earnings reports since markets closed last Friday have led to some price changes as of the last half hour of trading today: LDK Solar Co. Ltd. (NYSE: LDK) is up 10.8% at $3.28 (our coverage here); Humana Inc. (NYSE: HUM) is down -8.4% at $80.49; Senior Housing Properties Trust (NYSE: SNH) is up 0.32% at $22.09; and Sohu.com Inc. (NASDAQ: SOHU) is down -7.4% at $51.62.

Tomorrow we get earnings from Arch Coal Inc. (NYSE: ACI), Archer Daniels Midland Co. (NYSE: ADM), Bankrate Inc. (NASDAQ: RATE), Broadcom Corp. (NASDAQ: BRCM), Chesapeake Energy Corp., Domino’s Pizza Inc. (NYSE: DPZ); Office Depot Inc. (NYSE: ODP); Pfizer Inc. (NYSE: PFE); Sirius XM Radio Inc. (NASDAQ: SIRI); and Valero Energy Corp. (NYSE: VLO).

Other standouts from today include the following stocks:

Barnes & Noble Inc. (NYSE: BKS) is up about 54% at $21.07 after posting a new 52-week high of $26.00 earlier today. The company has created a joint venture with Microsoft Corp. (NASDAQ: MSFT). More coverage here.

Sunoco Inc. (NYSE: SUN) is up 19.5% at $48.89 after posting a new 52-week high of $49.50 earlier today. The company is merging with Energy Transfer Partners L.P. in a deal worth about $5.3 billion. More coverage here.

VeriFone Systems Inc. (NYSE: PAY) is down -12.7% at $47.52. The company’s stock was downgraded at Deutsche Bank, along with comments that the company was inflating its organic growth estimates.

Stay tuned for Tuesday. Richmond Fed President Jeffrey Lacker, Minneapolis Fed President Naryana Kocherlakota, San Francisco Fed President John Williams, and Philadelphia Fed President Charles Plosser are all giving speeches. Motor vehicle sales are expected to be reported throughout the day. We have noted the following events on the schedule (all times Eastern):

10:00 a.m. – Institute for Supply Management manufacturing index
10:00 a.m. – Construction spending
11:30 a.m. – 4- and 52-week bill auctions

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: ACI, ADM, ARII, BKS, BRCM, CHK, DG, DMD, DPZ, HUM, KALU, KFT, LDK, ODP, PAY, PFE, RATE, SIRI, SNH, SOHU, SUN, TRP, VLO

Early Recovery Laggards (AMGN, ARII, IP, MCD, SRZ, URI)

247wallst — Tue, 18 Mar 2008 09:06:22 +0000

It almost seems that no matter what happens, there are always some major companies whose shares just won’t recover when the broad market recovers. Sometimes it’s on news, and sometimes it is just because that sector won’t be the real beneficiary of a market move or a change in the economy. A 200 point-plus gain in the DJIA and a 43 point gain in the NASDAQ doesn’t mean some aren’t struggling.

American Railcar Industries (NASDAQ: ARII) is one of the worst ones today with shares down over 10% at $19.45, now down more than 50% from 52-week highs. UBS is the culprit this morning after it downgraded the stock from an already cautious Neutral rating down to a new SELL rating.

Amgen (NASDAQ: AMGN) just can’t catch a break. Its shares are at a new 52-week low under that $43.02 level down at $42.45 today. When your core anemia products are under fire from Congress and from the FDA, this is what happens.

International paper (NYSE: IP) is feeling the wrath of a downgrade after JP Morgan cut its rating to Neutral from Overweight, and shares are down almost 2% at $28.94 today.

McDonalds (NYSE: MCD) is so far the only DJIA component trading lower this morning after gapping up. Maybe this defensive name is going to have a hard time duplicating its massive same-store performance that has been seen over the last two years or more. Shares are down marginally at $54.21, and its 52-week trading range is $43.65 to $63.69.

Sunrise Senior Living (NYSE: SRZ) shares are down almost 10% at $20.85 this morning, which is another 52-week low. Two weeks ago it gave preliminary results and noted it would have a 4140 million adjustment. This morning it noted that it missed the deadline for filing its annual report, a real no-no for investors.

United Rentals Inc. (NYSE: URI) ar also down over 1% today at $17.50 after JPMorgan cuts its rating from an already cautious Neutral down to an "underweight" rating.

Jon C. Ogg
March 18, 2008