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The rail unit of The Andersons, Inc., once again set a record in the first quarter of 2013, as its operating income rose to $14.6 million on revenue of $46 million, a marked increase over income of $8.0 million on revenue of $36 million in the same quarter last year.
The company said the Rail Group benefited from higher lease rates and increased income from car financings. The group recognized $9.3 million in pre-tax gains on sales of railcars and related leases and non-recourse transactions, up from $6.3 million on similar transactions in the first quarter of 2012. The average utilization rate for the quarter was 84.6 percent, down slightly from 85.7 percent for the same period last year. The company’s rail fleet has increased by more than 500 cars during the past year to 23,508 cars.
The Andersons as a whole reported net income attributable to the company of $12.6 million for the quarter, or $0.67 per diluted share, on revenue of $1.3 billion, down from $18.4 million, or $0.98 per diluted share, on revenue of $1.1 billion the year before.
Nearly 2,000 railroad and supplier representatives were on hand this week as the American Short Line and Regional Railroad Association held its annual convention in Atlanta.
The ASLRRA 2013 Connections convention drew a record number of exhibitors and topped last year’s total attendance. Rail industry suppliers and contractors took up 215 exhibit booths at the sold-out exhibit hall at Atlanta’s Marriott Marquis Hotel, displaying some of the latest technology products and services.
Judy Petry, chair of the 2013 convention and vice president of the group’s Central Region, was particularly pleased by the turnout of more than 500 of her short line railroad colleagues. Petry serves as controller at Farmrail System in Oklahoma.
The event had a festive tone because it marked the 100th anniversary of the ASLRRA, whose roots trace back to Atlanta. In 1913, 22 short line managers met in Atlanta to form the Short Line Railroad Association of the Southeast. By 1917, the group merged with other regional organizations to become the American Short Line Railroad Association and the headquarters moved to Washington, D.C. Today, ASLRRA represents more than 500 short line, regional, Class I, switching, transit and tourist lines and more than 440 railroad suppliers.
In addition to the celebration of the association’s centennial, the event featured tributes to the two top association leaders: Rich Timmons, who is retiring after 11 years as president of the association, and Mike Ogborn, who is stepping down as chairman of the group.
Timmons was praised widely for his role in raising the short line industry’s national profile and growing the association. Jack Koraleski, president and CEO of Union Pacific Railroad, described Timmons as “a man that I trust and respect,” and wished him well in retirement.
Federal Railroad Administrator Joe Szabo remarked that Timmons “will be sorely missed by the railroad industry.” And Association of American Railroads President Ed Hamberger saluted his colleague and friend Timmons for his outstanding leadership of the short line industry and its association.
Ogborn, who is an advisory board member with OmniTRAX, was honored with the Thomas Schlosser distinguished service award. The award, named in memory of the popular ASLRRA chairman who passed away in 2011, recognizes individuals for their long-term and dedicated service to the association and its members.
Canadian Pacific Railway today reported its profit in the first quarter of 2013 was C$217 million (about US$211.5 million), a 51 percent spike from $138.4 million in the same quarter in the previous year.
Revenue in the first quarter was an all-time high of $1.5 billion, increasing 9 percent year-over-year.
Operating income in the first quarter was $352.8 million, rising 32 percent from the first quarter of 2012, while the operating ratio was a record 75.8 percent, a 430 basis point increase.
“CP delivered the best first quarter results in its history despite challenging winter conditions,” said E. Hunter Harrison, CEO, in a written statement.
The Class I railroad had an average of 14,920 employees in the first quarter of 2013, compared with an average of 16,671 employees in the first quarter of 2012, following CP’s plans, announced in December 2012, to cut about 4,500 employee positions, run faster and longer trains and possibly sell rail lines in the United States in order to improve its operating ratio.
“There remains a lot of work to do as we continue to make significant changes to our operating model,” Harrison said. “With a very strong start to the year and momentum quickly building, I am now even more confident that we are on pace toward the best year-end financial and operating performance in CP’s history.”
CSX reported its profit in the first quarter of 2013 was $459 million, or $0.45 per share, rising 2 percent compared with $449 million, or $0.43 per share, in the first quarter of 2012.
Revenue in the first quarter was almost $3.0 billion, relatively stable versus the same period last year, as increases in merchandise, intermodal and other revenue offset declines in the railway’s coal sector. Combined with operational growth, these revenues fueled operating income in the first quarter of $875 million and an operating ratio of 70.4 percent.
Furthermore, the Jacksonville, Fla.-based Class I railroad said in a written statement that its board of directors has approved a 7 percent increase in the quarterly dividend of $0.15 on the company’s common stock, payable on June 14, 2013, to shareholders of record at the close of business on May 31, 2013. The board also approved a new $1.0 billion share buyback program, which is authorized to begin immediately and is expected to be completed over the next 24 months.
“These actions reflect the strength of CSX’s core earning power and its confidence in the future,” said Michael J. Ward, chairman, president and CEO, in a written statement. “They build upon the $2.3 billion of investment CSX is making this year to meet the nation’s future transportation needs and drive long-term shareholder value.”
CSX said that it now expects to achieve an operating ratio in the high 60s by 2015, while remaining focused on attaining a mid-60s operating ratio in the long term. Simultaneously, the company expects to produce average annual earnings-per-share growth of 10 to 15 percent through 2015, based on 2013 earnings, which are expected to be flat to down from prior-year levels.
Florida East Coast Railway has taken delivery of FEC #703, the first of three locomotives refurbished in 2013 to come out of the Progress Rail rebuild facility in Patterson, Ga., with the Heritage paint scheme that debuted on locomotive #714 in 2011.
The original scheme was inaugurated in 1939, at the beginning of dieselization on the Florida East Coast.
“Today, the paint scheme signifies the continued growth that FEC aspires to attain as a premier regional rail network serving the east coast,” said Jim Hertwig, president and CEO, “and I am proud to incorporate our rich heritage into our future plans.”
Founder Henry Flagler’s strategy for FEC was to move freight by rail utilizing Florida’s deep water ports in conjunction with a vision for growth generated by the opening of the Panama Canal. The modern FEC is taking steps to meet the demand expected to arise from the opening of the Panama Canal expansion in 2015.
“FEC is currently building an even stronger infrastructure,” said Fran Chinnici, SVP Engineering and Purchasing. “We have major construction projects underway to expand rail operations at Port Miami, Port Everglades, West Palm and the Bowden Terminal in Jacksonville to handle the increased demand. The refurbished locomotives are just one example of FEC’s investment in handling future growth.”
The Intermodal Transportation Institute’s board of directors at the University of Denver has elected Mathieu Faure, from Canadian Pacific Railway, and Keith Reardon, from Canadian National Railway, as new members. Each will serve a three-year term.
With CP and CN joining the ITI board, all seven of the largest freight railroads in North America – the Class I railroads – are represented on the board, including BSNF Railway, CSX, Kansas City Southern Railway, Norfolk Southern, Union Pacific and now CP and CN.
Reardon was appointed vice president of intermodal services for CN in May 2012 and is based in Toronto in Canada. In 2009, he was appointed vice president of supply chain solutions, where he was responsible for the automotive and iron ore business units and CN’s non-rail transportation services, including transloading, freight forwarding and warehousing. He also directed many supply chain and business development initiatives for CN. Previously, he was assistant vice president of CN’s transloading operations.
Faure is vice president of market and sales of intermodal with CP, a role he assumed in October 2012. Previously, he served as general manager of CP’s logistics and market development since 2010, and prior to that, he held increasingly senior commercial roles in the domestic intermodal and potash and fertilizer sectors of CP’s business. Before joining CP in 2006, he served as general manager of specialized equipment with Groupe Robert.
Berkshire Hathaway reported that subsidiary BNSF Railway had earnings in 2012 of $3.37 billion, jumping 13.5 percent year-over-year from $2.97 billion.
Yearly revenue was $20.84 billion in 2012, increasing 6.6 percent from $19.55 billion in 2011, and operating expenses were $14.84 billion, rising 4.1 percent from $14.25 billion in 2011.
Wabtec reported its profit attributable to shareholders in the fourth quarter of 2012 was $64.8 million, or diluted earnings per share of $1.34, jumping 40% from $46.3 million, or diluted earnings per share of $0.96, in the fourth quarter of 2011.
Total quarterly sales were $610.4 million, rising from $534.6 million in the same quarter in the previous year. Of that total, the freight group earned $342.3 million, falling 2% from $349.3 in the fourth quarter of 2011.
For the full year of 2012, net income attributable to Wabtec shareholders was $251.7 million, or $5.19 diluted earnings per share, increasing 48% from $170.1 million, or $3.51 diluted earnings per share, in 2011. Total annual sales were $2.4 billion, up from $2.0 billion in 2011. Freight sales specifically were $1.5 billion in 2012, up from $1.2 billion in 2011.
“The company’s performance in 2012 was strong, and we are anticipating another record year in 2013,” said Albert J. Neupaver, Wabtec’s president and CEO, in a written statement.
The provider of technology-based products and services for rail and industrial markets issued 2013 guidance for earnings per diluted share of about $5.85, with revenue expected to increase 8 to 10 percent for the year.
The rail unit of The Andersons, Inc., continued its strong performance through the fourth quarter of 2012 to achieve record operating income of $42.8 million for the year, more than 300% higher than the segment’s 2011 operating income of $9.8 million. Revenue rose 45.8% year-over-year to $156 million in 2012. For the fourth quarter, the Rail Group had operating income of $8.6 million on revenue of $29 million, up from operating income of $2.3 million on revenue of $25 million in the same quarter of 2011.
The company said it experienced significant growth in gross profit in its leasing business due to higher lease rates, as utilization remained stable at 84.6%. The Rail Group also recognized $23.7 million in pre-tax gains on sales of railcars and related leases and non-recourse transactions (in which the company continues to provide car management services to the purchaser and typically holds an option to purchase the railcars at the end of the assigned lease), compared with $8.4 million in 2011 for similar transactions. The company’s fleet increased by more than 600 railcars in 2012, to approximately 23,300 cars.
For 2012, The Andersons as a whole reported net income attributable to the company of$79.5 million, or $4.23 per diluted share, on revenue of $5.3 billion, down from $95.1 million, or $5.09 per diluted share, on revenue of $4.6 billion the year before. The company earned $15.0 million in the fourth quarter of 2012, or $0.80 per diluted share, on revenue of $1.7 billion, versus net income of $21.7 million, or $1.17 per diluted share, on revenue of $1.3 billion in the same quarter of 2011.
The American Short Line and Regional Railroad Association officially announced that its president, Rich Timmons, will retire by summer’s end. Timmons has been at the helm of the ASLRRA since 2002, joining the organization following a career in the Army where he attained the rank of lieutenant general and a post at Norfolk Southern.
ASLRRA Board Chairman Mike Ogborn said that the Washington-based trade group has been “blessed” by Timmons’ service. “Under his leadership, ASLRRA has greatly expanded both its membership and the scope and reach of its work on behalf of that membership,” Ogborn said in an ASLRRA publication. “In addition to accomplishments too numerous to mention, he has brought new prestige to and recognition of the association. I join with all ASLRRA members in wishing him a long, healthy and happy retirement.”
ASLRRA Board Vice-Chair Ed McKechnie will lead a search committee to find Timmons’ successor. Letters of interest and resumes are due March 1 to firstname.lastname@example.org.
The search announcement on the ASLRRA website, which includes a complete job description, is available at: