Class I railroads will announce their second quarter earnings results over the next two weeks against a backdrop of declining traffic in the U.S. and indications that economic growth is slowing. But a combination of rate increases, efficiency gains,...
http://trn.trains.com/news/news-wire/2019/07/wall-street-expects-higher-class-i-railroad-earnings-despite-us-traffic-slump
Brian Schmidt, Editor, Classic Trains magazine
Figures lie, liars figure and the railroads have some pretty good figuring liars when it comes to publishing financial reports - all nice and legal and not worth the paper it take to print them.
Never too old to have a happy childhood!
The SEC would not agree with your contentions.
As I said, railroad stock price is based on current and future expected earnings (plus future and expected stock dividends) not directly on traffic levels.
Also a shallow dip in Railroad traffic does not mean a recession is looming. It means the Economy is slowing, it has happened before where traffic does a shallow dip and then bounces back heavier and the Economy keeps right on chugging. If the dip was well into the double digits I would be worried but less than 5%? So far not much to see here.
CMStPnP As I said, railroad stock price is based on current and future expected earnings (plus future and expected stock dividends) not directly on traffic levels. Also a shallow dip in Railroad traffic does not mean a recession is looming. It means the Economy is slowing, it has happened before where traffic does a shallow dip and then bounces back heavier and the Economy keeps right on chugging. If the dip was well into the double digits I would be worried but less than 5%? So far not much to see here.
It may not just be that car loadings are slightly down that has people worried. I think many were expecting loadings to start rising. The reason floating around for the last two or three hiring classes they held was they were expecting car loadings to increase.
While overall levels may only be slightly down, it could be some specific sectors that had large losses that might be causing some concern.
Jeff
charlie hebdoThe SEC would not agree with your contentions.
Like I said - legal. Liars have a lot of legal wiggle room when it comes to accounting practices.
BaltACD charlie hebdo The SEC would not agree with your contentions. Like I said - legal. Liars have a lot of legal wiggle room when it comes to accounting practices.
charlie hebdo The SEC would not agree with your contentions.
Ha ha! You've been hanging around Smokey Joe too long. You're beginning to sound like him.
charlie hebdo BaltACD charlie hebdo The SEC would not agree with your contentions. Like I said - legal. Liars have a lot of legal wiggle room when it comes to accounting practices. Ha ha! You've been hanging around Smokey Joe too long. You're beginning to sound like him.
There have been too many financial collapses to count that 'came out of nowhere' - at least nowhere that could be found in prior financial staements - the 2007-2008 'recession' was because of 'skull duggery' with financial reports in virtually every industry that was 'too big to fail'.
There are myriad ways to show the 'story' management wants to tell the public, rather than the story that management is actually facing, that management f'd up and things are getting worse.
The Pennsylvania Railroad was paying dividends until it wasn't. But the SEC was happy with their accounting until it went bankrupt. When I left them (co-op job) in 1960, I said "Things are bad, they can't get much worse" but they got worse. And in '68, we got ....PennCentral.
Does any one have any idea about how many slow orders are "normal" and whether their numbers are increasing?
Electroliner 1935The Pennsylvania Railroad was paying dividends until it wasn't. But the SEC was happy with their accounting until it went bankrupt. When I left them (co-op job) in 1960, I said "Things are bad, they can't get much worse" but they got worse. And in '68, we got ....PennCentral.
Yes, the Pennsylvania Railroad paid dividends. Even when it was showing a loss on its very honest financial reporting.
They said: "We had to give our union employees a raise so it would be unfair to shut out our shareholders while doing so."
The government economic regulators really, really, really screwed them up. I'll provide details if anyone wants them. Hint: "The ingot molds case." I've seen it cited without comment because the government decision was so stupid that it's self expanitory.
CMStPnPAlso a shallow dip in Railroad traffic does not mean a recession is looming. It means the Economy is slowing, it has happened before where traffic does a shallow dip and then bounces back heavier and the Economy keeps right on chugging. If the dip was well into the double digits I would be worried but less than 5%? So far not much to see here.
What is the disclaimer that is used in ads for financial services? Something like, "Past performance is no guarantee of future activity". Seems to me that very philosophy might apply here, due to there being so many factors that could influence the futures of investors. Topmost of which is the political uncertainty, mostly in this country, but also in the rest of the of the world.
Equally important, IMHO, is the effect climate change is going to have on both the food and energy industries, not to mentioned the myriad of other side-effects that will manifest and affect other areas of production. Industries and companies are going to have to change in order to accomodate the changes in growing locations, seasonal disruptions, and the worlds increasing inability to feed the huge (and growing) populations.
In addition, populations living where climate changes affects them most are going to be forced to relocate, and areas that before were too inhospitable to live but have become better due to the change in climate will see increases in population. Some locations will gain, others will lose.
Progress is always change, but change is not always progress.
greyhounds Electroliner 1935 The Pennsylvania Railroad was paying dividends until it wasn't. But the SEC was happy with their accounting until it went bankrupt. When I left them (co-op job) in 1960, I said "Things are bad, they can't get much worse" but they got worse. And in '68, we got ....PennCentral. Yes, the Pennsylvania Railroad paid dividends. Even when it was showing a loss on its very honest financial reporting. They said: "We had to give our union employees a raise so it would be unfair to shut out our shareholders while doing so." The government economic regulators really, really, really screwed them up. I'll provide details if anyone wants them. Hint: "The ingot molds case." I've seen it cited without comment because the government decision was so stupid that it's self expanitory.
Electroliner 1935 The Pennsylvania Railroad was paying dividends until it wasn't. But the SEC was happy with their accounting until it went bankrupt. When I left them (co-op job) in 1960, I said "Things are bad, they can't get much worse" but they got worse. And in '68, we got ....PennCentral.
Interesting reading . great for anyone who thinks congress knows best .
https://www.courtlistener.com/opinion/1481144/louisville-and-nashville-railroad-co-v-united-states/
Penn Central was reportedly also paying dividends, even as it was borrowing to fund day to day operations. According to the Wiki article on the PC, dividends were paid out to create the illusion of success among shareholders. Back then access to company information was more cumbersome than it would be today... now anyone can access financials on any publicly traded company via the internet.
UlrichPenn Central was reportedly also paying dividends, even as it was borrowing to fund day to day operations. According to the Wiki article on the PC, dividends were paid out to create the illusion of success among shareholders. Back then access to company information was more cumbersome than it would be today... now anyone can access financials on any publicly traded company via the internet.
That may be the case. However, companies are not making their internal financial decisions on the numbers they are publishing to the public. They have on set of books for tax purposes, they have another set of books for SEC purposes, with some of this book being published to the public, and another set of books that they are actually using to run the company. This isn't just a railroad issue as all larger corporations are playing the same games.
CSX 2nd quarter earnings per share are up over last year even though 2nd quarter revenues and net income are down compared to last year. An additional $1 billion in long term debt helped to fund $1.656 billion in share repurchases so earnings per share could grow on lower earnings but fewer shares outstanding.
It will be interesting to see how total long term debt moves over the next several years and compare that to where it was when Michael Ward left.
jeffhergertIt may not just be that car loadings are slightly down that has people worried. I think many were expecting loadings to start rising. The reason floating around for the last two or three hiring classes they held was they were expecting car loadings to increase. While overall levels may only be slightly down, it could be some specific sectors that had large losses that might be causing some concern. Jeff
In cases like this I always go to the Fed's analysis as to what they think is the issue.
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