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Weak coal shipments weigh on US railroads

Steel News - Published on Mon, 21 May 2012

Reuters reported that more cars, less coal. That sums up the shipping trends at the biggest US railroads so far in the second quarter.

Three of the biggest freight railroads Kansas City Southern, Norfolk Southern Corp and CSX Corp reported strong growth in auto shipments but weakness in their key coal-hauling businesses as they gave mid quarter updates to a transportation conference on Friday.

Kansas City Southern shipments of coal, farm products and chemicals were weaker than it expected a month ago, but the company kept its full-year profit forecast unchanged, saying shipments should pick up once the railroad moves past temporary factors.

Mr Michael Upchurch Chief Financial Officer told the Bank of America Merrill Lynch global transportation conference in Boston said \"We had a much more positive outlook 30 days ago.\"

The company said Q2 energy line-haul revenue including coal is now expected to be down by single-digit percentages, down from earlier expectations of double-digit growth. Its shares were flat at midday.

Second-quarter line-haul revenue, which excludes fuel surcharges and other items is also expected to be down in the agriculture and mineral category as well as in chemicals and petroleum. Kansas City Southern expects all categories to show positive sales gains for the year and the company reaffirmed its full-year forecast.

Norfolk Southern, whose shares fell 0.6% said car shipments were up 14% from the end of the first quarter through May 12 and have also driven up shipments of steel.

Mr Wick Moorman Chief Executive said \"We anticipate it remaining that way through the rest of the year.\"

Source - Reuters


Posted By : admin on Mon, 21 May 2012
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