(The Associated Press circulated the following on July 26.)
NEW YORK — Shares of railroad operators fell in trading Thursday, as disappointing earnings reports continued to cite poor volumes and underlying freight market challenges.
Kansas City Southern said Thursday its second-quarter earnings fell short of Wall Street’s expectations, although they rose 32 percent from last year.
FreightCar America Inc., which manufactures railcars, cited lower volumes and continued struggles in the North American market as its second-quarter earnings plunged 69 percent.
Shares Kansas City Southern fell $3.49, or 9 percent, to $34.84. FreightCar America shares fell $2.35, or 4.5 percent, to $49.80.
JPMorgan analyst Thomas R. Wadewitz suggested in a note to clients that the challenges are continuing, as volumes continue to fall into the third quarter.
Overall, rail volumes declined 1.4 percent last week, he said, following a 3.3 percent decrease in the prior week.
Forest products, metals, and coal were the most significant segment losses – with forest products declining 8.8 percent compared to last year.
Intermodal traffic also declined 1.2 percent, the analyst reported.
Still, bright spots for the industry continue in the chemical and automotive sectors, with respective gains of 5.8 percent and 8.8 percent, Wadewitz said.
In midday trading, shares of Norfolk Southern Corp., which reported a modest rise in profit Wednesday, fell $1.26, or 2.3 percent, to $53.22.
Burlington Northern Santa Fe Corp. fell $2.59, or 3 percent, to $84.10 and Canadian Pacific Railway Ltd. fell $3.65, or 4.6 percent, to $75.13. Both railroads reported earnings Tuesday.
Among the companies that reported last week, Union Pacific Corp. fell $2.69, or 2.2 percent, to $120.12 and CSX Corp. fell $1.71, or 3.5 percent, to $47.30.