Following a period of relative quiet over the Christmas holiday, Canadian Pacific’s endeavor to acquire Norfolk Southern has picked up steam with issuance of a white paper, “A 21st Century Railroad for a 21st Century Economy,” in which CP argues that “a change in the railroad industry status quo is necessary to support continued growth in the North American economy.”
In reporting rail traffic for all of 2015, Association of American Railroads (AAR) Senior Vice President John T. Gray said, “Weaknesses in energy and manufacturing, as well as, world economic softening had a negative impact on both carload and intermodal traffic in 2015.”
In reporting rail traffic for all of 2015, Association of American Railroads (AAR) Senior Vice President John T. Gray said, “Weaknesses in energy and manufacturing, as well as, world economic softening had a negative impact on both carload and intermodal traffic in 2015.”
Citing a “tepid macroeconomic climate that is impacting all freight transport providers, including truckers,” Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl is lowering estimates and reducing price targets well before the railroads report fourth-quarter and full-year 2015 financials. Cowen has revised 4Q15 and 2016 earnings estimates downwards for most railroads, truckers and 3PLs (third-party logistics providers).
During much of fourth-quarter 2015, investor interest in Wabtec (Westinghouse Air Brake Technologies Corp.) has increased due to concerns about the North American railcar cycle, Wabtec’s pending acquisition of Faiveley Transport, the sustainability of margins and returns, and the company’s declining share price. Steve Barger of KeyBanc Capital Markets looked at revenue drivers and the Faiveley accretion model.
Norfolk Southern on Dec. 23, 2015 rejected Canadian Pacific’s third and most recent proposal to acquire NS. CP on Dec. 16 offered $32.86 in cash, a fixed exchange ratio of 0.451 shares in a new company that would own Canadian Pacific and Norfolk Southern, and 0.451 of a Contingent Value Right.
Amtrak may not be winning any awards for on-time performance, but it is getting special recognition from PETA (People for the Ethical Treatment of Animals).
Wabtec Corporation has signed contracts worth about $45 million to provide equipment and services for a Positive Train Control (PTC) system for the Metra, the Northeast Illinois commuter rail system. The contracts are with Metra and Parsons Transportation Group (PTG).
Cowen and Company’s Matt Elkott expects freight car builder The Greenbrier Companies (GBX) “to make strategic adjustments to position itself well amidst changing railcar dynamics, potentially through acquisitions.”
Refuting practically every purported benefit that Canadian Pacific has given, and citing substantial regulatory risks and uncertainties as well as many other negatives, Norfolk Southern on Dec. 4, 2015 loudly and firmly rejected CP’s proposal to merge the two railroads into a transcontinental.