Author Topic: NS 2nd Q earnings  (Read 468 times)

ckpcpqq

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NS 2nd Q earnings
« on: July 24, 2019, 11:05:30 AM »
NS reported that earnings for the second quarter increased 2% over second quarter 2018, although they were quick to add that earnings due solely to rail operations increased 4%.  Revenues increased one per cent but traffic volume decreased 4%.  The operating ratio improved to 63.6 from 66.3.  The stock price (7/24) has declined about 3.5% on the news.

Revenues and car loadings for the three big publicly traded Class 1 American railroads are basically flat when comparing the 2nd Qs of 2018 and 2019.  CSX and UP experienced a one percent decline in revenue and NS a one per cent increase.  For all three roads, car loadings declined 4%.

Maybe the Canadians know something we don't.  CN has just reported a 9% increase in revenues and a 2% increase in car loadings.  Their stock price increased about 3% on the news.

Maybe we should now sing a chorus of "O Canada!"
« Last Edit: July 24, 2019, 11:23:25 AM by ckpcpqq »

OrangeAndBlack

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Re: NS 2nd Q earnings
« Reply #1 on: July 24, 2019, 12:46:38 PM »
NS reported that earnings for the second quarter increased 2% over second quarter 2018, although they were quick to add that earnings due solely to rail operations increased 4%.  Revenues increased one per cent but traffic volume decreased 4%.  The operating ratio improved to 63.6 from 66.3.  The stock price (7/24) has declined about 3.5% on the news.

Revenues and car loadings for the three big publicly traded Class 1 American railroads are basically flat when comparing the 2nd Qs of 2018 and 2019.  CSX and UP experienced a one percent decline in revenue and NS a one per cent increase.  For all three roads, car loadings declined 4%.

Maybe the Canadians know something we don't.  CN has just reported a 9% increase in revenues and a 2% increase in car loadings.  Their stock price increased about 3% on the news.

Maybe we should now sing a chorus of "O Canada!"

Canada doesn’t have tariffs.

Rick

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Re: NS 2nd Q earnings
« Reply #2 on: July 24, 2019, 02:09:36 PM »
Canada doesn’t have tariffs.
And they’ve been in PSR for many years and now are getting their traffic back they lost. 


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ckpcpqq

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Re: NS 2nd Q earnings
« Reply #3 on: July 24, 2019, 10:59:23 PM »
Canada doesn’t have tariffs.

It's not that simple.  Yes tariffs are part of it but it affects CN too.  If American farmers are not shipping soybeans for export at a port like New Orleans or Mobile, that hits CN as well as CSX or NS.  With the expansion of the Panama Canal those ports are now set up for shipments to the far east.  IIRC, about 35 to 40% of CN's business is done in the US.

Beyond tariffs, I think the reason for CN's success is just better management.  When Harrison left, his successor was Claude Mongeau who quickly moved reassure shippers that Harrison had alienated.  He got the EJE Chicago bypass done on time and on budget, and now CN trains move thru the Chicago area faster than any of the other Class 1 road.  There are many such examples.  He left CN a year or so ago, and his successor, Jean(?) Ruest (not sure about the first name) seems to be cut from the same cloth.

Foote and Squires could learn a lot from them.

OrangeAndBlack

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Re: NS 2nd Q earnings
« Reply #4 on: July 25, 2019, 01:01:57 AM »
It's not that simple.  Yes tariffs are part of it but it affects CN too.  If American farmers are not shipping soybeans for export at a port like New Orleans or Mobile, that hits CN as well as CSX or NS.  With the expansion of the Panama Canal those ports are now set up for shipments to the far east.  IIRC, about 35 to 40% of CN's business is done in the US.

Beyond tariffs, I think the reason for CN's success is just better management.  When Harrison left, his successor was Claude Mongeau who quickly moved reassure shippers that Harrison had alienated.  He got the EJE Chicago bypass done on time and on budget, and now CN trains move thru the Chicago area faster than any of the other Class 1 road.  There are many such examples.  He left CN a year or so ago, and his successor, Jean(?) Ruest (not sure about the first name) seems to be cut from the same cloth.

Foote and Squires could learn a lot from them.

I know it's not as simple as tariffs, but they contribute. The Canadian lines don't have as much exposure.

Glad you included that CN does 35-40 percent of its business in the U.S. as I was curious about that.

What is CP's percentage? Without adding up their American trackage, it would seem to me that CP has less U.S. trackage than CN does, but that's just an (un)educated guess on my part.

ckpcpqq

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Re: NS 2nd Q earnings
« Reply #5 on: July 25, 2019, 05:57:18 PM »
I know it's not as simple as tariffs, but they contribute. The Canadian lines don't have as much exposure.

Glad you included that CN does 35-40 percent of its business in the U.S. as I was curious about that.

What is CP's percentage? Without adding up their American trackage, it would seem to me that CP has less U.S. trackage than CN does, but that's just an (un)educated guess on my part.

I don't know CP's percentage, but since its US trackage is considerably less than CN's, you're probably right in saying it's smaller.