(The Associated Press circulated the following on September 11.)
NEW YORK — Shares of U.S. railroad operators rose in trading Tuesday, after a JPMorgan analyst said recent coal rate case rulings in favor of Burlington National Santa Fe Corp. relieved some regulatory and legislative pressures for the sector.
The Surface Transportation Board on Monday decided in favor of Burlington National on two cases that had alleged the railroad charged unreasonable rates for coal transport.
Analyst Thomas R. Wadewitz said there is some chance of a one-time boost to revenue in the third and fourth quarters as a result of the decision.
These are just two in a recent string of rate case wins for the railroads, Wadewitz said. The analyst noted the decision will help offset some of the legislative scrutiny for other rails, and provide a “favorable backdrop” for Union Pacific, which is currently the only rail target of a major coal rate case under review by the STB.
However, Wadewitz said that despite recent rulings, many of the rail sector’s troubles still remain, including outstanding regulatory issues and disputes with shippers.
Weak carload demand and uncertainty over the condition of the broader economy are also still big concerns for the near-term, the analyst noted.
In early afternoon trading, shares of Burlington Northern Santa Fe Corp. rose 70 cents to $80.92, while Union Pacific Corp. rose $1.71 to $107.58.
Kansas City Southern rose 75 cents, to 2.5 percent, to $31.16 and Norfolk Southern Corp. rose 91 cents to $50.01.
Shares of Burlington’s eastern rival CSX Corp. dropped 48 cents to $38.81.