(The Associated Press circulated the following article on June 13.)
NEW YORK — Shares of rail companies rose in Tuesday trading as an analyst increased his U.S. rail estimates on better-than-expected overall rail volume.
Merrill Lynch analyst Ken Hoexter raised U.S. rail second-quarter estimates by nearly 4 percent on average, and said all four U.S. railroads are performing above volume targets.
“Volume growth is led by Burlington Northern Santa Fe’s quarter-to-date growth of 8.3 percent, well above our previous 5.5 percent target,” Hoexter said.
Burlington Northern Santa Fe Corp., the nation’s No. 2 railroad, is seeing a 13.5 percent rise in its coal volumes, driven by strong demand and a recovery of trains per day out of the Powder River Basin region, Hoexter said. Shares of Burlington Northern Santa Fe gained 53 cents to $71.78 in morning trading on the New York Stock Exchange.
Union Pacific Corp., the nation’s largest rail company, is benefiting from higher volume and coal carloads, said Hoexter, who expects a 3.9 percent increase in second-quarter volume growth.
Union Pacific gained 99 cents to $86.31 on the New York Stock Exchange. The stock is down about 12 percent since hitting a 52-week high of $97.49 on April 24.
Meanwhile, Hoexter noted that CSX Corp. is seeing lower volume, but has continued to eliminate unprofitable revenue. CSX shares gained 52 cents to $61.31 on the NYSE.
Elsewhere in the sector, Norfolk Southern Corp. gained 21 cents to $48.49. However, shares of Canadian Pacific Railway Ltd. fell $2.12, or 4 percent, to $48.22. Hoexter said.
Canadian rails are seeing volume softness, due to weakness in forest products, coal and chemicals/potash markets. The stock has traded in a 52-week period of $33.60 and $57.73.