Freight Railroads May Exceed 1Q Earnings Expecations
urlington Northern Santa Fe Corp. and Union Pacific Corp., the two biggest U.S. railroads, may beat analysts' first-quarter earnings forecasts after shipments of consumer goods and coal surged in February, analysts told Bloomberg News.
Railroads are benefiting from a flow of imports from Asia and a widening U.S. trade deficit, Bloomberg said.
Stronger-than-expected traffic prompted Morgan Stanley analyst James Valentine to raise his estimate of BNSF’s first-quarter profit to 74 cents a share from 71 cents, Bloomberg said. The average forecast for the company’s first-quarter earnings is 68 cents a share, according to analysts surveyed by Thomson Financial, Bloomberg said.
Total U.S. rail traffic has grown 5.2% in the first eight weeks of this year, Valentine said, topping his earlier 3.8% projection, Bloomberg reported
U.S. imports from Asia rose 17% in January from a year earlier, led by Chinese exports of shirts and other apparel, the Commerce Department said in its latest report.
BNSF, the biggest U.S. railroad by shipments, moved 23% more goods by a combination of rail and truck in February compared with a year earlier, its biggest gain in 16 months, according to the Association of American Railroads.
Shipments at UP rose 12%, AAR said.
Intermodal was the biggest business by volume for the railroads in January and February, AAR reported.
