I think these train tracks must run in a giant circle.
Didn't we just hear another train conductor declaring that we've seen a bottom in North American freight traffic woes during the second quarter? Since geography and freight mixes render each railroad fairly distinct, however, it's important to treat each operator separately. Canadian National Railway
In the case of Canadian National Railway, however, despite my firm conviction that the overall U.S. economy may have slowed its descent without reaching any manner of a bottom, the opportunist inside me can't help noting the peculiar strengths of this particular rail operator. Let's begin by looking at the quarterly earnings, which absorbed a 22% decline in freight volumes with only a 15% drop in revenue and a 16% hit to the bottom line.
Displaying the kind of profitability that will be key to weathering this protracted downturn, the company's operating ratio of 67.3% was substantially leaner than CSX's reported 73.4%.
In a most fortunate development, Canadian National recently acquired some of the export-bound coal traffic from Teck Resources
As this week's results from Peabody Energy
I still consider Canadian National Railway a well-positioned competitor within a fundamentally challenged industry … even if I don't think that industry's truly hit bottom yet.