(The Associated Press circulated the following on April 14.)
NEW YORK — Shares of most railroad operators rose Monday, as a JPMorgan analyst predicted the group will largely beat Wall Street’s first-quarter earnings expectations when they begin reporting this week.
Analyst Thomas R. Wadewitz raised his earnings forecast for the four largest U.S. railroads – Union Pacific Corp., Burlington Northern Santa Fe Corp., CSX Corp. and Norfolk Southern Corp. – noting that fuel surcharges collected during the first quarter should drive better earnings than Wall Street currently expects. Operational improvements driving down costs, coupled with higher revenue per carload, will also benefit the rails, he said.
However, Wadewitz lowered earnings estimates on two major rails north of the border – Canadian National Railway Co. and Canadian Pacific Railway Ltd. – noting pricing pressures and severe winter weather.
He said shares of Norfolk Southern Corp. provide the biggest opportunity for investors in the near future, as Wadewitz expects the rail to beat analysts’ expectations by the widest margin. For the longer term, he said, operational improvements should drive growth most significantly at Union Pacific Corp., the largest U.S. rail by revenue.
In afternoon trading, shares of Union Pacific rose 19 cents to $130.40. Burlington Northern added 17 cents to $93.36, and Norfolk Southern gained $1.29, or 2.4 percent, to $56.28. CSX rose 84 cents to $57.15.
Canadian National rose 12 cents to $49.36. A stock bucking the trend was Canadian Pacific, which fell 48 cents to $63.82.