I recently quipped that the evening news would be far less unsettling to viewers if sung to a catchy tune in place of the customary monotone. Just once, I'd love for the CEO of a great company in a struggling industry to forego the predictable earnings call in favor of a song. In this case, let's call it the "Chattanooga choo-choo boo-hoo."
CEO Wick Moorman tried to whistle Dixie, suggesting the drop in freight volumes would bottom out sometime in the second half of 2009 as President Obama's stimulus package gathers steam. On a sour note, though, equipment manufacturers Caterpillar
Stimulus speculation aside, the numbers were terrible. The company's overall freight volumes fell 20% from the prior year, as emerging weakness in the domestic coal market piled onto the woeful performance of intermodal and general merchandise categories. In January, when I screamed like Eddie Van Halen for Fools to step off the rails for a while, the four-week rolling average freight volumes for Norfolk Southern were down only 18%. With that average now 26% below year-ago levels and Mr. Moorman warning of further reductions ahead, I could not be more serious about singing this cautionary tune.
The U.S. coal market is deteriorating beyond initial expectations. Peabody Energy
Adding expectations of further declines in key segments like intermodal transport, cars, car parts, and lumber, Wick Moorman's song is already sounding like a Carpenters-style tearjerker. Perhaps the evening news isn't so bad after all.