For Immediate Release
Chicago, IL – December 1, 2009 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the Railway Industry, including Burlington Northern Santa Fe Corp (BNI) and CSX Corporation (CSX).
A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/27739/Railway+Industry.
U.S. Rail Transport Bids Fair
During the recession, Burlington Northern Santa Fe Corp (BNI) has demonstrated significant operating leverage through its ongoing dedication to control costs and improve productivity. BNI has the best commodity mix and is positioned to be the fastest growing U.S. rail company during the next expansion. The actions taken by management to improve its network and lower its costs should expand the company’s margins when volumes begin to come back online.
CSX Corporation (CSX) looks optimistic based on the its earnings power, pricing power, potential improvements in network fluidity, cost controls, probable improvements in safety and fewer distractions. We expect management to continue to successfully hold down its costs with carloads. Management is doing a solid job of cutting costs while planning for the eventual rebound in the industry. Steady pricing, improving volumes, cost savings and a moderating regulatory environment will likely help the company to outperform its peers in the near term.
The slowing economic conditions in the U.S. will cause industry revenue to contract in 2009 as freight volumes fall. Employment in the industry is expected to contract sharply in 2009 as rail companies slash jobs. In the near term, profits are expected to fall as revenue from fuel surcharges shrinks, along with demand reduction.
Difficult domestic economic conditions are expected to continue through 2010 as the liquidity crisis in the financial markets spreads through the economy. The slowing economic conditions, plunging manufacturing production, consumer spending and international trade are likely to take a further toll on the industry.
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