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Investing

Analyzing The Rail Roads Industry

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published

By Yaser Anwar< CSC of Equity Investment Ideas

  • Rail volume growth has slowed significantly. Rail volume growth have slowed significantly over the past several weeks and the trend has been below The Street’s expectations for most of the major railroads.
  • Despite continued support from YoY growth in coal (+5.3%), agriculture (+6.5%), further weakness in the economically sensitive industrial segments such as chemicals, forest products, metals and a deceleration in the pace of inter-modal growth (+1.2%) have caused total volume growth for the major railroads to fall to +0.6% vs 3.3% growth in the 3rd Q.
  • Automotive production cuts and plant closures have been a drag on growth for most of the rails, while the housing slowdown is showing up in reduced shipments of building materials alongside weakness in forest products , which has also driven weakness in rail volumes.
  • The average fuel surcharge posted rates in 4Q have fallen from 3Q due to the decline of fuel prices in late August and September. In light of the recent softness in the weekly rail volumes analysts could start cutting/adjusting EPS estimates of CSX, NSC etc.

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    About the Author Douglas A. McIntyre →

    Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

    McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

    His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

    A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

    TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

    McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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