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Researched by Industrial Info Resources (Sugar Land, Texas)--Although all signs point to domestic coal use in the U.S. declining, coal shipments, especially for export, continue benefitting railroads, including CSX Corporation (NASDAQ:CSX) (Jacksonville, Florida) and Union Pacific Corporation (NYSE:UNP) (Omaha, Nebraska). Both companies reported increased year-over-year coal-shipment revenue, which helped boost second-quarter income from last year. Industrial Info is tracking more than $1.3 billion in projects involving CSX and Union Pacific.
CSX reported coal-shipment revenue of $530 million for the quarter, compared with $416 million in second-quarter 2016, an increase of 27%. While shipments of coal for domestic use declined by 3%, shipments of coal export were up 30% year over year. "Export coal demand remains strong, and we now expect to ship around 30 million tons for the year," said CSX Chief Financial Officer Frank Lonegro during the company's conference call. CSX shipped 16.9 million tons of export coal for the six months ended June 30.
Union Pacific's revenue from coal in second-quarter 2017 was $619 million, compared with $494 million in second-quarter 2016, an increase of 25%. In the company's conference call, Beth Whited, chief marketing officer for Union Pacific, said: "On a tonnage basis, Powder River Basin and other regions were both up 17% from higher natural gas prices and stronger West Coast exports, which benefitted from favorable global economics for western U.S. coal. ... Looking forward to the second half of the year, coal volumes will face tougher year-over-year comps, but we expect absolute volumes to be sustained sequentially if natural gas prices and export demand are maintained. As always, weather conditions will be a key factor of demand." For more on the U.S. coal sector, see July 19, 2017, article - What Felled Coal and What Does its Future Look Like?
While coal showed the strongest revenue growth for both companies, other sectors increased revenue as well. Chemicals revenues were up 3% for CSX and 4% for Union Pacific. Intermodal revenues were up 7% for CSX and 3% for Union Pacific. An area of difference was the automotive sector, which showed a 2% decline in revenues for CSX and an increase of 5% for Union Pacific.
Union Pacific reported net income of $1.16 billion in second-quarter 2017, compared with $979 million in second-quarter 2016. CSX reported second-quarter net income of $510 million, compared with $445 million in second-quarter 2016.
Among the top active Union Pacific projects is the 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 in summer 2018 and be completed in the third quarter of 2019. 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. RBF Consulting (Phoenix, Arizona) is performing engineering work on the project. For more information, see Industrial Info's project report.
Among CSX's top projects is the construction of an intermodal terminal in Rocky Mount, North Carolina. The 550-acre rail hub is intended to serve CSX as a major transportation hub for intermodal transportation in the southeastern U.S. by handling approximately 270,000 container moves per year. Construction is set to begin next summer and be completed before the end of 2019. The project has an estimated total investment value of $270 million. For more information, see Industrial Info's project report.
Currently under way for CSX is the construction of an intermodal terminal near Ambridge, Pennsylvania. The facility is being constructed on the 70-acre site of a former railroad yard and will provide shipping capabilities for 50,000 containers per year. Trumbull Corporation (Pittsburgh, Pennsylvania) and Polivka International (Matthews, North Carolina) are acting as general contractors on the project, which has an estimated total investment value of $65 million. 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.
CSX reported coal-shipment revenue of $530 million for the quarter, compared with $416 million in second-quarter 2016, an increase of 27%. While shipments of coal for domestic use declined by 3%, shipments of coal export were up 30% year over year. "Export coal demand remains strong, and we now expect to ship around 30 million tons for the year," said CSX Chief Financial Officer Frank Lonegro during the company's conference call. CSX shipped 16.9 million tons of export coal for the six months ended June 30.
Union Pacific's revenue from coal in second-quarter 2017 was $619 million, compared with $494 million in second-quarter 2016, an increase of 25%. In the company's conference call, Beth Whited, chief marketing officer for Union Pacific, said: "On a tonnage basis, Powder River Basin and other regions were both up 17% from higher natural gas prices and stronger West Coast exports, which benefitted from favorable global economics for western U.S. coal. ... Looking forward to the second half of the year, coal volumes will face tougher year-over-year comps, but we expect absolute volumes to be sustained sequentially if natural gas prices and export demand are maintained. As always, weather conditions will be a key factor of demand." For more on the U.S. coal sector, see July 19, 2017, article - What Felled Coal and What Does its Future Look Like?
While coal showed the strongest revenue growth for both companies, other sectors increased revenue as well. Chemicals revenues were up 3% for CSX and 4% for Union Pacific. Intermodal revenues were up 7% for CSX and 3% for Union Pacific. An area of difference was the automotive sector, which showed a 2% decline in revenues for CSX and an increase of 5% for Union Pacific.
Union Pacific reported net income of $1.16 billion in second-quarter 2017, compared with $979 million in second-quarter 2016. CSX reported second-quarter net income of $510 million, compared with $445 million in second-quarter 2016.
Among the top active Union Pacific projects is the 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 in summer 2018 and be completed in the third quarter of 2019. 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. RBF Consulting (Phoenix, Arizona) is performing engineering work on the project. For more information, see Industrial Info's project report.
Among CSX's top projects is the construction of an intermodal terminal in Rocky Mount, North Carolina. The 550-acre rail hub is intended to serve CSX as a major transportation hub for intermodal transportation in the southeastern U.S. by handling approximately 270,000 container moves per year. Construction is set to begin next summer and be completed before the end of 2019. The project has an estimated total investment value of $270 million. For more information, see Industrial Info's project report.
Currently under way for CSX is the construction of an intermodal terminal near Ambridge, Pennsylvania. The facility is being constructed on the 70-acre site of a former railroad yard and will provide shipping capabilities for 50,000 containers per year. Trumbull Corporation (Pittsburgh, Pennsylvania) and Polivka International (Matthews, North Carolina) are acting as general contractors on the project, which has an estimated total investment value of $65 million. 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.
