First Quarter Earnings

In this edition: Earnings season highlights, the rise in flatbed demand and Roadcheck starts Wednesday.

Rail investors and observers think the Class I railroads’ efforts to bolster train and engine crew counts will improve rail service in the second half of this year. But geopolitical, economic and regulatory uncertainties also abound.

Higher revenues contributed to increased profits in the first quarter for BNSF.

Customers are keen to lock in capacity for the year and mitigate risk, executives said during Hub Group’s first-quarter 2022 earnings call.

Canadian Pacific believes its acquisition of Kansas City Southern is still on pace to receive federal approval sometime early next year.

The operating plan, which builds upon the precision scheduled railroading-inspired initiative for NS’ manifest network, will be launched sometime late in the second quarter of this year.

“There’s been a big shock in the supply chains, and we’re working very hard to get our rhythm back and our operation back and to serve our customers well,” says new CEO Tracy Robinson.

Precision scheduled railroading will help the western U.S. railroad recover service more efficiently, UP executives argue.

The eastern U.S. railroad says its hiring initiative is going well.

The U.S. railcar lessor doesn’t expect the war in Ukraine to impact company profits, but the conflict is affecting operations in Poland.

The year 2023 and beyond could boost railcar production volumes for Greenbrier as global low-carbon mandates drive freight to rail, say Greenbrier executives.

Rising rail traffic and lower numbers of railcars in storage should benefit FreightCar America, as should anticipated market demand to replace an aging railcar fleet, executives said during Monday’s first-quarter earnings call.

FreightWaves looks at five themes that ran throughout the earnings discussions of the Class I railroads.

Anticipated growth for intermodal will help to support Hub Group’s investments for that sector in 2021.

First-quarter revenue results were aligned with FLEETCOR’s expectations, but at $609 million, they fell 8% short of first-quarter 2020 results.

Executives with parent company Berkshire Hathaway expect BNSF to take steps to protect the railroad’s franchise as the merger between Kansas City Southern and one of the Canadian railways makes its way through regulatory review.

Norfolk Southern aims to add longer trains, improve car velocity and provide more technological tools for customers and for safety inspections, with an eye toward future competition with autonomous trucks.

First-quarter operating ratio was 61.5%, compared with an adjusted operating ratio of 63.7% in the first quarter of 2020.

CN outlined some scenarios in which a merged railway can compete with long-haul trucking.

Canadian railway CN reported net profit of CA$974 million in the first quarter of 2021, a 3.7% decline from the first quarter of 2020.

The Surface Transportation Board will need to scrutinize a proposed merger between Kansas City Southern and either Canadian Pacific or CN to ensure it doesn’t hurt the operations of competing railroads, Union Pacific’s head said on the company’s first-quarter earnings call.

A 4% drop in operating revenue contributed to a 9% decline in net income for Union Pacific’s first quarter.

For now, Canadian Pacific is not planning to take part in a bidding war with rival CN to acquire Kansas City Southern, saying that its offer is more likely to meet regulators’ litmus test for mergers.

CSX has capacity on its network, space on its trains and the workforce and locomotives it needs to handle an anticipated growth in service needs in 2021, according to company executives.

CSX’s first-quarter net income fell 8% to $706 million from $770 million a year ago.

Kansas City Southern expects to maintain its financial targets for 2021 on a recovering economy and an anticipated volume rebound. It declined to comment on post-merger operational changes.

Kansas City Southern’s net income for the first quarter of 2021 rose 0.7% despite a 4% decline in revenue and a 1% drop in carload volumes.

The manufacturer is still producing new railcars but expects market conditions to be rough for a while.

The railcar lessor is looking for further add-ons to its fleet as competitors face pressure from the COVID-19 pandemic and the volatile crude oil market.

Multimillion-dollar backlog will help the rail equipment and locomotive manufacturer stay afloat, executives said.

The COVID-19 pandemic dented volume growth in the first quarter for the privately owned railroad.

The cuts to train starts are part of the railroad’s wider objective to implement precision scheduled railroading.

Like other railroads, Norfolk Southern is feeling the effect of lower rail volumes because of the coronavirus pandemic.

The effect that the coronavirus pandemic is having on rail volumes could get worse in the coming weeks before things get better, according to executives.

The railway managed to boost its first-quarter net income despite the February rail blockades and the COVID-19 pandemic.

The western U.S. railroad can deploy additional cost reduction measures, but how much cost savings it can realize from those measures will depend on how much rail volumes fall in the second quarter.

Despite lower revenues, the western U.S. railroad saw its first-quarter net income increase as the company trimmed quarterly expenses by 10%.

o hedge against rail volume uncertainty in the second quarter, CSX aims to control costs.

CSX’s (NASDAQ: CSX) first-quarter net profit fell 7.7% amid lower revenues and a record operating ratio. First-quarter 2020 net income was $770 million, or $1 a share, compared with $834 […]

Precision scheduled railroading and its workforce will help CP get through anticipated challenges in the second quarter, company executives said.

The railway’s first-quarter net income slipped on higher income tax expenses. But total revenue rose nearly 16% in the first quarter of 2020 while operating expenses were roughly flat-to-higher.

Loan quality deteriorated slightly, but TriumphPay is growing fast.

The railroad will be keeping tabs on operational costs as a way to hedge against the economic uncertainty brought about by the COVID-19 pandemic.

Cross-border movements of chemicals and petroleum products, as well as intermodal shipments, helped propel revenue higher.

Weak demand on the asset light side weighs down results.

Releasing its earnings before the market open on May 2, Dana Inc. (NYSE: DAN) reported a drop in net income, which was $98 million in the first quarter of 2019, down from $108 million compared with the same three months of 2018.

Paccar  (NASDAQ: PCAR) reported record revenues and net income for the first quarter of 2019, beating analysts’ estimates on April 30.

USA Truck (NASDAQ: USAK) posted its most profitable first quarter results since 2006 on April 25. The quarter is now the seventh straight quarter of profitability.