According to Cowen and Company’s Third-Quarter 2016 Rail Shipper Survey, shippers “are anticipating the lowest rate of price increases over the next 6-12 months that we’ve seen in our survey in nearly eight years,” says Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl.
At Cowen and Company’s Eighth Annual Global Transportation Conference, analyst Matt Elkott hosted a railcar outlook and overview discussion panel featuring Railroad Financial Corp. President and Railway Age Financial Editor David Nahass, Northeast Logistics Systems LLC Founder and Principal Richard Flynn, and National Steel Car Senior Vice President Marketing and Sales Bob Pickel.
Revenue declines in six traffic groups were a key contributing factor in Union Pacific’s second-quarter financials, for which the railroad reported diluted earnings per share of $1.17, a 15% decline from the prior-year quarter; operating income of $1.66 billion, down 15%; and an operating ratio of 65.2%, up 1.1 points.
Shippers expect a 2.9% price increase from the railroads over the next 6-12 months, according Cowen and Company’s Second-Quarter 2016 Rail Shipper Survey (downloadable from the link below).
In the current down market, a “strong case” can be made for consolidation in the freight car building sector, according to Cowen and Company analyst Matt Elkott.
Canadian Pacific on June 21, 2016 provided an earnings outlook for the year’s second-quarter “due to lower-than-anticipated volumes in bulk commodities, such as grain and potash, the unexpected and devastating wildfires in northern Alberta and a strengthening Canadian dollar.”
As the industry continues to weather the current economic storm, Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl offers the following analysis:
Near-term outlooks from Class I railroads at upcoming conferences “will contain a somewhat more pronounced level of caution given further softening in volumes since first-quarter 2016 earnings,” according to Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl. Following is an analysis released May 12, 2016:
Half the rail shippers queried in Cowen and Company’s 1Q16 Rail Shipper Survey say they will or may place orders for freight cars in the next twelve months, according to Cowen and Company analyst Matt Ellkott. “Add eventual opportunistic buying by lessors/investors and some equipment replacement by railroads, and order levels may see upside from the current subdued expectations.”
Wall Street analyst Cowen and Company has partnered with Chainalytics, a leading firm that collects tens of billions of annualized freight spend dollars covering well over 230 direct subscriptions with key shippers and third-party logistics providers globally, to offer the “Chainalytics-Cowen Index” monthly report.