(The Associated Press circulated the following on February 29.)
NEW YORK — Shares of U.S. railroad operators fell along with the broader market Friday, as investors reacted to a trade industry report that indicating carload volumes slipped last week.
Citing data from the Association of American Railroads, Bear Stearns analyst Edward Wolfe said total shipments fell 0.3 percent last week compared with the same week of 2006. The week before last, volumes increased 3 percent year over year.
Carloads are down 1 percent so far this quarter, Wolfe said, which is in line with the decline posted in the fourth quarter of 2007.
The analyst noted that carloads related to the slumping housing market continue to post the biggest declines, along with intermodal shipments, which involve moving freight from one method of transportation to another.
Paper and lumber shipments sank 12.6 percent; minerals and stone volumes fell 7.4 percent; intermodal carloads declines 2.8 percent; and shipments of automobiles slipped 1.6 percent. Shipments of grain, coal, metals and chemicals all rose.
Norfolk Southern Corp. posted the most significant year-over-year declines, Wolfe said. The eastern rail’s carloads fell 2.4 percent last week, dragged down by intermodal and auto volumes.
Late Thursday, Norfolk Southern said in a regulatory filing it expected full-year freight volumes to increase by 2 percent, and overall freight prices to increase by 4 percent.
Stifel Nicolaus John Larkin said the forecasts were slightly higher than his predictions, and noted that he would likely raise earnings estimates on the railroad if demand “plays out” as Norfolk Southern expects this year.
However, Larkin noted that volumes so far this year have been below his expectations. He maintained his 12-month price target of $64.
In midday trading, Norfolk Southern Corp. fell $1.11, or 2 percent, to $53.47 and Union Pacific Corp. slipped $1.68 to $124.58.
CSX Corp. lost $1.28, or 2.5 percent, to $49.16, and Kansas City Southern fell 97 cents, or 2.6 percent, to $36.
Burlington Northern Santa Fe Corp. retreated 70 cents to $88.35.