Today's Charting on CSX and Norfolk Southern: Coal Volumes Challenge Industry

Today's Charting on CSX and Norfolk Southern: Coal Volumes Challenge Industry

  PR Newswire

  LONDON, January 23, 2013

LONDON, January 23, 2013 /PRNewswire/ --

Declining coal shipments were a major concern for the railroad industry last
year. StockCall has assessed the following railway majors, Norfolk Southern
Corp. (NYSE: NSC) and CSX Corp. (NYSE: CSX), and free reports on these
companies are available at  

Despite last year's depressed coal shipments, utility coal consumption did
improve for the last two months of the year though. But this did not help
companies like Norfolk Southern and CSX Corp. to bring in better result for
their recently posted quarters. Both companies released their fourth quarter
earnings with feeble coal demand weighing on their profitability. A
wide-ranging technical and charting analysis on Norfolk Southern is available
for free at

Norfolk Southern reported a 14% drop in profit for its fourth quarter to $1.30
per share from $1.42 per share reported a year ago. According the company's
CEO, Wick Moorman, the Norfolk headquartered railroad managed to absorb to
some extent a 23% decrease in coal revenue on the back of a surge in
intermodal shipments and shipments of auto, chemicals and materials linked to
housing. Norfolk Southern is planning to cut expenses by $100 million this
year, and it also decided to take cost reduction steps by cutting 300
maintenance jobs.

Conversely, CSX corp. [ Free Report on CSX ] ^[ ^1 ^] also reported a decline
in its fourth quarter earnings of 3%, and weakness in coal demand was again to
blame. The railroad operator stated that its coal revenue fell 18% and even a
better performance in its automotive, intermodal and crude oil shipments did
not offer a good counterbalance to the negative impact of the decrease in

Despite a positive finish to 2012, a shifting rail freight landscape will make
significant gains challenging for industry players to come by. The natural gas
supply glut continues to cause coal's popularity to wane. Subsequently,
freight companies with strong exposure to coal demand may struggle to grow
revenues. Barring a major change to natural gas supplies, prices or energy
consumption preferences, coal shipments may likely remain flat or continue to

Profitability is becoming a challenge to come by but favorable fuel prices and
increased merchandise volumes are encouraging. Investors will want to track
which major rail companies can most effectively reduce exposure to coal


1.CSX Corp. Technical Analysis [ ]

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