- JANUARY 14, 2011, 2:07 P.M. ET
EARNINGS PREVIEW: US Transport Sector Recovery Full Speed AheadBy John Kell OF DOW JONES NEWSWIRES TAKING THE PULSE: The U.S. transportation sector's rebound from last year's poor showing is expected to continue in the fourth quarter, with revenue and profit growth expected from nearly all major companies. Freight traffic on U.S. railroads grew in 2010 from the prior year, indicative of a "slow but broad-based" economic recovery, according to the Association of American Railroads, although the latest figures still trailed 2008. Meanwhile, the U.S. agency that regulates railroads said Tuesday it will consider a major overhaul of rules to force freight-rail companies to compete more aggressively for farmers, coal producers and other shipping customers. The Surface Transportation Board is planning to hold a hearing in May to study possible changes, and it asked railroads to weigh in. COMPANIES TO WATCH: Union Pacific Corp. (UNP) - reports Jan. 20 Wall Street Expectations: Analysts surveyed by Thomson Reuters expect the company to report a profit of $1.48 on revenue of $4.34 billion, up from $1.08 a share on $3.75 billion in revenue a year ago. Key Issues: In early December, Union Pacific said fourth-quarter volume was up 9% from a year ago, a slightly lower growth rate than what the company reported through most of the year, but also against a tougher competitive environment. It said revenue gains should continue next year, as Union Pacific expects to benefit from rising coal demand, intermodal growth and higher automobile production. CSX Corp. (CSX) - reports Jan. 24 Wall Street Expectations: Analysts projected CSX to report earnings of $1.10 a share on revenue of $2.66 billion. A year earlier, the railroad had a profit of 77 cents on revenue of $2.32 billion. Key Issues: CSX has reported improved volume in each quarter this year, although finance executive Derrick Smith last month noted the shipments were still under a peak achieved in 2006. CSX had made strides in cutting costs and, according to investment firm Susquehanna, is "well poised to balance both increasing demand and operating efficiency into a sustained, broader economic recovery." Norfolk Southern Corp. (NSC) - reports Jan. 25 Wall Street Expectations: Wall Street expected the company to report a profit of $1.05 a share on revenue of $2.43 billion. A year ago, it posted earnings of 82 cents on revenue of $2.11 billion. Key Issues: The company last month said freight volume was up 10% for the first two months of the quarter, as the railroad company benefits from growth in its core businesses--including chemicals, agricultural products, steel and coal. Susquehanna last month touted Norfolk Southern's strong pricing relative to its peers, while adding the company's solid management team has struck a balanced approach to cost management and service continuity. United Parcel Services Inc. (UPS) - reports Feb. 1 Wall Street Expectations: The world's largest package-delivery company is seen earning $1.05 a share on revenue of $13.41 billion, up from 75 cents and $12.38 billion, respectively, a year earlier. Key Issues: UPS in November estimated global shipments from Thanksgiving to Christmas should be up 7.5% from last year, while peer FedEx Corp. (FDX) last month reported a busy holiday season as more customers shopped for holiday gifts online and used delivery services. Both were affected by service interruptions late in December along the East Coast after a blizzard rocked the region and caused multiple states to declare a state of emergency. YRC Worldwide Inc. (YRCW) - reports Feb. 4 Wall Street Expectations: Analysts predicted YRC to post a loss of $1.36 a share on revenue of $1.07 billion. A year ago, it reported a loss of $24 a share on revenue of $1.15 billion. The per-share figures reflects the company's 1-for-25 reverse stock split, which went into effect in October. Key Issues: The independent less-than-truckload carrier last month announced amendments to its credit agreement and asset-backed securitization facility, the latest concession the company won from its lenders as it finalizes plans to recapitalize YRC's balance sheet. YRC has also won deep employee concessions, and more broadly, should benefit from an uptick in demand for truckers. (The Thomson Reuters financial estimates and year-ago figures may not be comparable due to one-time items and other adjustments.) -By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com http://online.wsj.com/article/BT-CO-20110114-710339.html |
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