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Researched by Industrial Info Resources (Sugar Land, Texas)--While much of the press discusses how natural gas has been displacing coal as a fuel source at power plants, delivery of the black fuel during the first quarter of this year helped push U.S. rail profits higher. Late last year, the U.S. Energy Information Administration stated that U.S. coal use was likely to increase in the first quarter of this year because of increasing natural gas prices. Rail deliveries seem to have proved the agency correct. Rail operators Union Pacific Corporation (NSYE:UNP) (Omaha, Nebraska), Kansas City Southern (NSYE:KSU) (Kansas City, Missouri) and Norfolk Southern Corporation (NYSE:NSC) (Norfolk, Virginia) posted higher year-over-year profits in first-quarter 2017, in some cases setting quarterly income records. For all of these companies, income from coal delivery was up significantly.
First-quarter revenues from coal deliveries were up 25% year over year for Union Pacific, which posted first-quarter profit of nearly $1.1 billion, compared to about $1 billion in first-quarter 2016. In a conference call regarding the earnings, Chief Marketing Officer Elizabeth Whited said, "Coal revenue increased 25% for the quarter on a 16% increase in volume and 8% improvement in average revenue per car. On a tonnage basis, Powder River Basin and other regions were up 21% and 5%, respectively, from higher natural gas prices and stronger West Coast exports, which benefited from favorable global economics for western U.S. coal." The company's revenue from coal shipments was $648 million in the quarter.
Revenues from Kansas City Southern's Energy shipments, which include coal, crude oil and frac sand, were up 64% year over year. Utility coal revenues, at $42.8 million, were up 88% from the same period last year. The company reported first-quarter 2017 net income of $146.9 million, compared to $108.1 million in first-quarter 2016. "Volume increases of 30% in Energy and 38% in Automotive were the primary drivers of growth in the quarter," said Chief Marketing Officer Brian Hancock.
Norfolk Southern's $420 million revenue from coal was up 20% on a 21% volume increase. In the company's conference call, Chief Marketing Officer Alan Shaw pointed not only to increased domestic consumption because of higher natural gas prices, but also a strengthening export market for U.S. coal. "In our export market, we handled 6.3 million tons in the quarter through Lamberts Point [Virginia] and Baltimore due to improved demand and pricing for U.S. export coal. ...We expect utility coal volume to grow this year and remain confident in our quarterly guidance range of 17 million tons to 19 million tons." The company reported $433 million in first-quarter income, up 12% from first-quarter 2016.
Industrial Info is tracking more than $1 billion of projects involving Union Pacific, Kansas City Southern and Norfolk Southern. Among the largest of these projects is Union Pacific's planned $400 million rail switching and classification yard in Hearne, Texas. The railyard will enable Union Pacific to sort rail cars where seven of its lines cross, serving the Houston, Dallas and San Antonio areas, as well as spots along the Gulf of Mexico and east Texas. The project is planned to kick off this summer and be completed in the third quarter of 2018. For more information, see Industrial Info's project report.
Union Pacific also is planning a grassroot classification railyard near Red Rock, Arizona. The six-mile-long railroad switching yard will allow for greater capacity and efficiency throughout Arizona. The $300 million project is tentatively planned to kick off in the third quarter of 2018 and be completed in summer 2020. HDR Engineering Incorporated (Omaha, Nebraska) is performing engineering work on the project. For more information, see Industrial Info's project report.
One of the largest projects on Norfolk Southern's books is the replacement of a rail bridge near Buffalo, New York. The project began construction in late 2015 and is expected to be completed by the end of 2018. Norfolk Southern is replacing the existing iron truss rail bridge by constructing a 900-foot steel arch, single-track bridge and 1,200 feet of track on both ends of the structure to improve train speed, safety and efficiency. American Bridge Company (Fort Lee, New Jersey) is acting as general contractor on the $70 million project. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
First-quarter revenues from coal deliveries were up 25% year over year for Union Pacific, which posted first-quarter profit of nearly $1.1 billion, compared to about $1 billion in first-quarter 2016. In a conference call regarding the earnings, Chief Marketing Officer Elizabeth Whited said, "Coal revenue increased 25% for the quarter on a 16% increase in volume and 8% improvement in average revenue per car. On a tonnage basis, Powder River Basin and other regions were up 21% and 5%, respectively, from higher natural gas prices and stronger West Coast exports, which benefited from favorable global economics for western U.S. coal." The company's revenue from coal shipments was $648 million in the quarter.
Revenues from Kansas City Southern's Energy shipments, which include coal, crude oil and frac sand, were up 64% year over year. Utility coal revenues, at $42.8 million, were up 88% from the same period last year. The company reported first-quarter 2017 net income of $146.9 million, compared to $108.1 million in first-quarter 2016. "Volume increases of 30% in Energy and 38% in Automotive were the primary drivers of growth in the quarter," said Chief Marketing Officer Brian Hancock.
Norfolk Southern's $420 million revenue from coal was up 20% on a 21% volume increase. In the company's conference call, Chief Marketing Officer Alan Shaw pointed not only to increased domestic consumption because of higher natural gas prices, but also a strengthening export market for U.S. coal. "In our export market, we handled 6.3 million tons in the quarter through Lamberts Point [Virginia] and Baltimore due to improved demand and pricing for U.S. export coal. ...We expect utility coal volume to grow this year and remain confident in our quarterly guidance range of 17 million tons to 19 million tons." The company reported $433 million in first-quarter income, up 12% from first-quarter 2016.
Industrial Info is tracking more than $1 billion of projects involving Union Pacific, Kansas City Southern and Norfolk Southern. Among the largest of these projects is Union Pacific's planned $400 million rail switching and classification yard in Hearne, Texas. The railyard will enable Union Pacific to sort rail cars where seven of its lines cross, serving the Houston, Dallas and San Antonio areas, as well as spots along the Gulf of Mexico and east Texas. The project is planned to kick off this summer and be completed in the third quarter of 2018. For more information, see Industrial Info's project report.
Union Pacific also is planning a grassroot classification railyard near Red Rock, Arizona. The six-mile-long railroad switching yard will allow for greater capacity and efficiency throughout Arizona. The $300 million project is tentatively planned to kick off in the third quarter of 2018 and be completed in summer 2020. HDR Engineering Incorporated (Omaha, Nebraska) is performing engineering work on the project. For more information, see Industrial Info's project report.
One of the largest projects on Norfolk Southern's books is the replacement of a rail bridge near Buffalo, New York. The project began construction in late 2015 and is expected to be completed by the end of 2018. Norfolk Southern is replacing the existing iron truss rail bridge by constructing a 900-foot steel arch, single-track bridge and 1,200 feet of track on both ends of the structure to improve train speed, safety and efficiency. American Bridge Company (Fort Lee, New Jersey) is acting as general contractor on the $70 million project. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
