(The Associated Press circulated the following on September 30.)
NEW YORK — As hurricanes wreaked havoc on the Gulf Coast, railroads suffered damage to their infrastructure _ and stock prices _ in the third quarter.
But beyond the storms’ effects, financial market turmoil has caused the most damage to railroad stocks. Before the steep sell-off over the last two weeks, four out of the seven major North American railroads actually had improved stock prices in the third quarter. But now, shares of all the major North American railroads have lost ground except Norfolk Southern Corp.
Analysts had expected the Norfolk, Va.-based company would likely benefit from shrinking truck capacity and higher coal exports more than other railroads. Norfolk Southern shares gained more than 5 percent in the third quarter.
Norfolk Southern’s eastern rival CSX Corp. said recently it expects the recent storms along the Gulf Coast and the Midwest to cut its third-quarter earnings by 6 cents to 8 cents per share. Shares of CSX lost about 13 percent in the period.
The most significant effect of the recent hurricanes was on chemical shipments in the Gulf of Mexico, which analysts said most severely impacted the two largest rails _ Union Pacific Corp. and Burlington Northern Santa Fe Corp. Both railroads’ stocks lost more than 6 percent of their value in the quarter.
Canadian Pacific Railway Ltd. took the biggest hit this quarter, down more than 18 percent for the three-month period.
But despite a hit to their stock prices and continuing uncertainty in the financial markets, analysts say the group will push through the downturn and report strong third-quarter results, boosted by lower fuel prices.