https://seekingalpha.com/article/4274272-csx-going-sleepless-earnings
Not really a surprise if one has been following the weekly AAR volume numbers reported over on Newswire.
The mystery to me is that more Wall Street analysts haven’t picked up on the continuing erosion in freight volumes. Generally speaking - freight doesn’t lie.
Juniata ManThe mystery to me is that more Wall Street analysts haven’t picked up on the continuing erosion in freight volumes. Generally speaking - freight doesn’t lie.
They focus on earnings which drives stock prices higher. Unless the fall in volume is very significant. In the case of CSX, their management sucks royally and has for like the last decade or so. So when CSX volumes decline it might have more of an impact on the stock. UP stock has been wavering but is increasing now on expectation of higher earnings numbers about to be released this next quarter.
I used to be a CSX stock holder about 3-4 years ago and just got tired of the excuses and the declining performance. Now I hear they are trying PSR, I have my doubts they will ever fully implement it and even worse it will be a distraction from attracting other sources of traffic. UP is just now reaping some cost cutting benefits so it's earnings are expected to rise this quarter. UP is pretty agressive with customer retention and with marketing based on what I saw when I was at General Motors. Maybe just their automotive traffic but what I observed of the UP sales team, really impressed me compared to the other railroads.
Over the past five years; CSX essentially has had no meaningful sales presence. Except for contract renewals; we went a 24 month period and never saw or heard from the individual who was supposed to be calling on us. And during that period of time I moved every bit of our non-captive traffic from CSX to NS and still he didn’t reach out to understand what was behind our drop in volume with them.
Bill Stephens had a story over on Newswire a few months ago quoting a CSX executive that they had plans to start expanding their sales force but; that was contradictory to what I was told by one of their senior people back in February when I asked if they planned to start expanding the sales team. The response I got was “no - why should we?”
From my perspective as a chemical customer; CSX’s marketing strategy didn’t change much from Michael Ward to Hunter or Jim Foote. The plan seems to be no more visionary than continuing to jack rates on a shrinking customer base.
CMStPnP I used to be a CSX stock holder about 3-4 years ago and just got tired of the excuses and the declining performance.
I used to be a CSX stock holder about 3-4 years ago and just got tired of the excuses and the declining performance.
Note to self, don't take stock advice from CMStPnP . 3 years ago CSX stock closed at $27 a share. Today it closed out at $78.40.
CMStPnP Now I hear they are trying PSR
Now I hear they are trying PSR
You really don't pay much attention to the railroad industry, do you?
An "expensive model collector"
Juniata ManOver the past five years; CSX essentially has had no meaningful sales presence. Except for contract renewals; we went a 24 month period and never saw or heard from the individual who was supposed to be calling on us. And during that period of time I moved every bit of our non-captive traffic from CSX to NS and still he didn’t reach out to understand what was behind our drop in volume with them. Bill Stephens had a story over on Newswire a few months ago quoting a CSX executive that they had plans to start expanding their sales force but; that was contradictory to what I was told by one of their senior people back in February when I asked if they planned to start expanding the sales team. The response I got was “no - why should we?” From my perspective as a chemical customer; CSX’s marketing strategy didn’t change much from Michael Ward to Hunter or Jim Foote. The plan seems to be no more visionary than continuing to jack rates on a shrinking customer base.
My understanding is that EHH elimintated what little 'sales' presence CSX had when he took over.
Never too old to have a happy childhood!
CMStPnP UP stock has been wavering but is increasing now on expectation of higher earnings numbers about to be released this next quarter.
UP stock has been wavering but is increasing now on expectation of higher earnings numbers about to be released this next quarter.
The same website's outlook on the UP.
https://seekingalpha.com/article/4269936-union-pacific-face-headwinds
"UNP is up over 15% Y/Y. Sans more stimulus, the company's top line could continue to falter. Sell UNP."
BaltACD My understanding is that EHH elimintated what little 'sales' presence CSX had when he took over.
Juniata man, what are your credentials that would establish you as whom we should respect and listen to?
40 year rail shipper having worked in grain; mining and chemicals. I have dealt with all the Class 1’s and many short line and regional railroads.
And; for what it’s worth; served two years as president of North American Rail Shippers Association; three years as Chairman of the NITL’s rail committee; three years on the BNSF Customer Advisory Board; eight years on the distribution committee of the American Chemistry Council; and four years on the board of Southwest Rail Shippers Association.
Now; whether you choose to listen me is entirely up to you.
Thank you,
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n012944 CMStPnP UP stock has been wavering but is increasing now on expectation of higher earnings numbers about to be released this next quarter. The same website's outlook on the UP. https://seekingalpha.com/article/4269936-union-pacific-face-headwinds "UNP is up over 15% Y/Y. Sans more stimulus, the company's top line could continue to falter. Sell UNP."
Want to run with the big boys you wouldn't pay much attention to seeking alpha which is OK by me because of anyone on the board I think your general outlook fits your potential to live miserably.
Long Term investor here not a day trader and I never pay attention to seeking alpha. They projected right with CSX but are all wrong on UNP.
Juniata ManOver the past five years; CSX essentially has had no meaningful sales presence.
Their investor calls are so dark and dreary as well. Not a lot of hope extended to potential investors. At least that was the case 3-4 years ago.
CMStPnP Want to run with the big boys you wouldn't pay much attention to seeking alpha which is OK by me because of anyone on the board I think your general outlook fits your potential to live miserably.
Good for you
CMStPnP They projected right with CSX but are all wrong on UNP.
They projected right with CSX but are all wrong on UNP.
You have already shown your knowledge of CSX is horrible, selling the stock right before it almost tripled in price. So you have no idea if their projection is right or wrong.
n012944You have already shown your knowledge of CSX is horrible, selling the stock right before it almost tripled in price. So you have no idea if their projection is right or wrong.
Ha! your trolling again.
Most of the increase in value was due to EHH announcing he was comming over to CSX to implement PSR and was indeed predictable after the announcement. In fact, the same thing happened with CN & CP stock values right after the announcement EHH was comming to rescue them. UP stock was high flying already. Once they announced PSR they might have increased 20-25% due to the EHH impact of PSR not as dramatic as CSX's increase because UNP was already a well run company. Most of UP's value is due to it's history as a well managed company over time and not based on a emotional news item. I don't day trade nor do I pay attention to day trader sites like seeking alpha which if you read the small print the author of the article that says SELL has a SHORT position in UNP Stock. Which might make sense if you change your investments each quarter and attempt to time the market. It's senseless if your a LT investor.
CSX has not recovered from their loss of coal traffic and is aleady abandoning large segments of track. UNP has done so much better compared to CSX just on this one item alone.
diningcar Thank you, This information assists participants at this site to spend our time with you, or not.
If I may loosely borrow from John Lennon - “I’d like to thank you on behalf of the group and I hope we‘ve passed the audition.”
This is why BNSF is so good. They DO NOT worry about wall street, they worry about servicing their customers, NOT driving them away and by doing so earn money. To me PSR stinks. It is the bane of all of the railroads that adopt it, and they deserve what they get.
Caldreamer
What concerns me is if to make earnings goals, the executives cut back on the maintenance of the railroad. Stop surfacing and tie replacements, allow for more slow orders and then start the deferred maintenance spiral. Lowers expences to match reduced revenue but cannibalize the plant. Any signs of lower plant investment this year?
Electroliner 1935What concerns me is if to make earnings goals, the executives cut back on the maintenance of the railroad. Stop surfacing and tie replacements, allow for more slow orders and then start the deferred maintenance spiral. Lowers expences to match reduced revenue but cannibalize the plant. Any signs of lower plant investment this year?
That is the Penn Central trap.
Electroliner 1935Any signs of lower plant investment this year?
caldreamer This is why BNSF is so good. They DO NOT worry about wall street, they worry about servicing their customers, NOT driving them away and by doing so earn money. To me PSR stinks. It is the bane of all of the railroads that adopt it, and they deserve what they get. Caldreamer
caldreamer This is why BNSF is so good. They DO NOT worry about wall street......
Berkshire Hathaway - Warren Buffett - pays attention to Wall Street. It owns BNSF. Its financial performance, along with those of the other holdings, which roll up to the consolidated financial statements, has an indirect impact on Wall Street.
BNSF's management does not have to be as sensitive to Wall Street as a corporation that has its shares traded publicly, but it probably is not immune to Wall Street's evaluations of its performance. And it is certainly not immune to Buffett’s expectations or those of the executive team.
The last time I checked, BNSF files financial statements with the SEC, so it is not likely that they are able to ignore completely the evaluations of the financial community.
One thing of interest for railroads is the amount of net debt issued on an annual basis compared to the stock buybacks.
Recent years have seen railroads touting returning over 100% of net income to shareholders in any given year. Pretty much the only way to do that is load up on debt-funded share buybacks, it would seem to me.
Study the increase in net debt of individual railroads over the last 5-7 years and draw your own conclusions.
kgbw49One thing of interest railroads is the amount of net debt issued on an annual basis compared to the stock buybacks. Recent years have seen railroads touting returning over 100% of net income to shareholders in any given year. Pretty much the only way to do that is load up on debt-funded share buybacks, it would seem to me. Study the increase in net debt of individual railroads over the last 5-7 years and draw your own conclusions.
The Hallmark of Hedge Funders - increase debt in the companies they control and pump the proceeds into the hedge fund via stock buy backs.
Juniata Man Not really a surprise if one has been following the weekly AAR volume numbers reported over on Newswire. The mystery to me is that more Wall Street analysts haven’t picked up on the continuing erosion in freight volumes. Generally speaking - freight doesn’t lie.
My point was exactly that. Declining freight volume/carloadings is a leading economic indicator. Likely things will get worse. I didn't post this as advice to buy or sell or make a comment on PSR.
Warren Buffett has a very good management team running BNSF and he lets them run the railroad. Yes, Berksire Hathaway is sensative to Wall street, but as a subsidiarty, BNSF itself is not, since Bershire Hathaway wons all of the stock.
Juniata Man diningcar Thank you, This information assists participants at this site to spend our time with you, or not. If I may loosely borrow from John Lennon - “I’d like to thank you on behalf of the group and I hope we‘ve passed the audition.”
diningcar
Thank you, This information assists participants at this site to spend our time with you, or not.
Re JPS1's comments on CSX's capital expenditures and investment:
- PDN.
Paul,
All that you seek is in Annual Reports and 10Ks on CSX website.
From page 40 of 2018 AR, which gives years 2016, '17 and '18.
Track, very stable
Bridges & Signals, generally increasing
PTC 2018, $225 million, a $100 M decrease from year before, with 2019 expected to drop to 100 M
Big drop was locomotives from $409 M in '16 to 3M in 2018. No need to buy power if you are storing it.
Capacity investments are a line item.
STB regulates what track expenditures must be capitalized and what can be expensed, so carriers have relatively little leeway in what they expense vs. what they capitalize. Track accounting is a world of its own, and I can not explain what I do not know.
Mac
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