(The Associated Press circulated the following article on February 15.)
NEW YORK — Shares of the nation’s railroads finished lower on Thursday, halting three days of gains by the group.
Shares of CSX Corp. fell $1.33, or 3.1 percent, to close at $40.77. On Wednesday the stock reached a new 52-week high of $42.53, capping a run-up of 13.6 percent over three days.
Shares of Union Pacific Corp. the nation’s largest railroad, lost $2.25, or 2.2 percent, to close at $102.24, while shares of western rival Burlington Northern Santa Fe gave up 72 cents to close the session at $82.93. Shares of Norfolk Southern Corp. surrendered 71 cents to finish the day at $51.54. All the stocks trade on the New York Stock Exchange.
The slide happened after a Citigroup analyst on Thursday cut CSX to “Hold” from “Buy” because of its run-up.
Also, word of softness in some patches of business at Union Pacific so far this year did not encourage investors.
Speaking at a transportation conference in Miami, Union Pacific Chief Financial Officer Rob Knight said volumes in 2007 got off to a slow start. Knight said carloadings so far this year are down 5 percent, due almost entirely to inclement weather. Coal, for instance, represents one of Union Pacific’s biggest freight segments and volume is down about 1 percent, despite strong demand.
“Some of the worst storms in history hit us right in our sweet spot — Nebraska,” Knight told analysts at the annual BB&T Capital Markets transportation conference. Union Pacific hauls coal east through Nebraska out of the nearby Powder River coal basin in southern Wyoming.
Knight, however, reiterated the company’s first quarter earnings guidance of $1.25 per share to $1.35 per share, saying those numbers would be a solid start to the year, “given the lighter volumes because of the weather.”
James Squires, senior vice president of financial planning at Norfolk Southern, told the same conference that the manufacturing sector still shows signs of weakness, but his company is bullish on the broader economy.
“The macro picture is good,” Squires said at the conference. “People expect an uptick in the second half and that is consistent with what we expect.”
Canadian railroads bucked the trading trend on Thursday. Shares of Canadian National Railway Co. added 36 cents to close at $47.18, while shares of Canadian Pacific rose 51 cents to finish at $56.02. Both trade on the NYSE.