Recovering from the worst business downturn in nearly 80 years, U.S. Class I railroads earned an average rate of return on net investment of 9.60 percent in the 12 months ended June 30, compared with a year-ago ROI of 9.47 percent, reports Railway Age magazine.
Separately, the chief rail analyst for the Wall Street firm of UBS told investors Aug. 26 that "U.S. railroads have stealthily been working on a fairly impressive streak ... beating the S&P 500 by an annual average of 16 percent for the last six years in a row."
UBS analyst Rick Paterson said, "Before 2004, the rails beat the market some of the time, but since then they've beaten the market all of the time [emphasis by Paterson]. Year-to-date 2010 is more of the same, with the rails up 5 percent versus the market down 5 percent. Looking forward we think the key takeaway ... is that we think there are still several years [of] outperformance left to run."
Railway Age reports that BNSF earned a return on investment of 10.25 percent vs. 10.20 percent a year ago, closely followed by Union Pacific, with a return of 10.02 percent for the year ended June 30, compared with 9.15 percent in the prior 12-month period.
Norfolk Southern, reports Railway Age, earned a return on investment of 9.44 percent in the latest 12-month period versus 10.89 percent a year ago; and CSX earned 8.54 percent versus 8.59 percent a year ago.
Meanwhile, the Journal of Commerce reports that "major U.S. railroads set a new 2010 peak for intermodal shipments in the week ending Aug. 21, the second straight week of new highs in container and trailer loadings."
Intermodal shipments originated by BNSF, CSX, Kansas City Southern, NS and Union Pacific were up 22.4 percent from the same week last year, reported the Journal of Commerce.
"And it was even up 2.6 percent from the 2008 week, meaning that intermodal traffic is running so strong that it has made up the losses since the worst parts of the recession," the Journal of Commerce reports. "The latest volume was the strongest for any week since the autumn peak period in 2008," said the Association of American Railroads.
