(The Associated Press circulated the following article on April 12.)
NEW YORK — Shares of the nation’s largest railroad companies moved higher Wednesday after a bevy of analysts issued reports anticipating strong first-quarter earnings results.
Union Pacific Corp. shares added 72 cents to $92.76 in afternoon trading on the New York Stock Exchange, while Norfolk Southern Corp. gained 63 cents, to $54.65.
CSX Corp. stock was trading up 63 cents, at $64.82, and Burlington Northern Santa Fe Corp., the largest rail company in the U.S., was up 51 cents, to $83.05. All four stocks are listed on the New York Stock Exchange.
UBS analyst Rick Paterson said the industry is exhibiting “unprecedented power” driven by the strength of the economy, high demand for long-haul shipping, and problems in the trucking sector.
The trucking industry expects capacity to continue to tighten and driver pay to keep rising, Paterson wrote in a client note, “which is clearly positive for all stocks in the North American railroad sector.”
Late Tuesday, Deutsche Bank analyst Jordan Alliger raised earnings per share forecasts for Burlington Northern, CSX, Norfolk Southern and Canadian National Railway Co., also citing woes in the trucking industry, including rising fuel prices.
Although cautioning that “a good portion of the positive outlook is already reflected in the share prices,” Alliger wrote in a client note “the mild winter weather combined with pricing that is stronger than initially anticipated should translate to higher EPS versus our models for the first quarter.”
Also Tuesday, Stifel Nicolaus analyst John Larkin said CSX was most likely in the industry to beat Wall Street estimates for the first quarter, adding that Wall Street is “starting to give company credit for the turnaround that is underway.” CSX is the only railroad Larkin has rated a “Buy.”
CSX was also identified as most likely to beat analyst views, along with Norfolk Southern, by Bear Stearns analyst Edward M. Wolfe. He said there is less potential for the Canadian rail operators to beat expectations.
Canadian National shares were down 63 cents, to $45.61 on the NYSE, while Canadian Pacific Railway Ltd. shares were up 63 cents, to $53.02 on the Big Board.