Blanchard Railroad Week in Review, Second Quarter 2007

The Railroad Week in Review:
Second Quarter 2007

Current Issues

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Week in Review, 4/6/2007
What Mexican truckers, major league baseball and some short-line railroads have in common. Canadian National first quarter earnings are expected to be off 5-10% yoy. Norfolk Southern estimates that 1Q07 diluted eps will be down about 3% yoy. The UMWU has gone on strike at two App coal mines served by NS and CSX. Greenbrier (GBX) will likely post a loss in its fiscal second quarter.
Week in Review, 4/13/2007
Buffett buys BNSF -- what does it mean for short lines? Who get a seat at the hedge fund table? JB Hunt downgrade has implications for the box car trade. Short line short takes.
Week in Review, 4/20/2007
CSX and UP lead off Earnings week with strong stories well presented. Michigan's Marquette Rail to purchase onboard wireless computers for its locomotive fleet. GWR March carloads. Class I traffic volumes uninspiring and likely to remain so for the nonce.
Week in Review, 4/27/2007
ASLRRA Annual Meeting in Baltimore a smashing success, host hotel sold out, some break-out sessions over-subscribed. A few observations and lessons learned. Class I earnings calls ended this week; commentaries and charts herewith.
Week in Review, 5/4/2007
Kathryn McQuade decamps from NS to become COO of Canadian Pacific. GWR reports Q1 revs up 16% on 2% more revenue units, eps up 3% yoy. Patriot Rail acquires Montana's Rarus rail, the former BA&P of 1950s traction fame. Rick Paterson on rails' room for more debt; my comments on one neat way to use it.West surpasses east in share of national freight revenues; Further opportunity for shrinking the number of shortline names.
Week in Review, 5/11/2007
Florida East Coast railroad and parent to be taken private by Fortress in a $3.5 bn transaction to close in 3Q07. Notes from the 8th annual Bear Stearns Transportation Conference. Watco acquires Millennium car shops.
Week in Review, 5/18/2007
The hedge fund feeding frenzy continues; what it means for short lines. CSX' Oscar Munoz gets an "A" for his financial presentation. Debbie Butler, Fred Ehlers move up at NS. Reader feedback.
Week in Review, 5/25/2007
CN Analyst Day in Toronto a huge success; lessons for shortlines. Class
I and shortline revenue units still down in Week 18 (May 5) and YTD.
FreightCar America orders off creating share-buying opportunity.The Ohio Rail Development Commission (ORDC) has OK’d $1.2 mm in grants and
loans; where it went and why. The list of money-management funds taking
positions in the Class I rails continues to grow; implications for the
industry.
Week in Review, 6/1/2007
Parallels between what the private-equity guys are doing and what short
lines should be doing. Why revenue unit volume counts. UBS says private
equity may not work in Canada. How to use usraildesktop.com to
fine-tune the short line traffic base. Notes from NARS. Observations on covered hopper demand for corn and DDGs from Peter Nesvold, railcar analyst at Bear Stearns. Coal hopper orders down at FreightCar America.
Week in Review, 6/8/2007
Norfolk Southern brings good news for shippers, short lines and investors to its NYC Analysts Day. Some lumber buyers say they are getting more product out of eastern US and Canada partly due to rising rail rates; an opportunity for short lines to hook up lanes? A cautionary note on TIH from New England. Rails having second thoughts about some of their aggressive pricing practices? Carlyle Group takes major RMI stake. A help-wanted listing from Amtrak. Seriously.
Week in Review, 6/15/2007
It looks like the DME sale is for real; several indicators converging. GWR same-store loads fall ten percent. Auto load decline more parts than finished vehicles; why it impacts short lines disproportionately.Amtrak detours in NC while ridership zooms upward in CA. Would that NS had more ops performance data in its Analysts Day presentation. Reader comments on the Crescent Corridor and the merch carload trade. Positive investor notes for UNP, TRN, GBX.
Week in Review, 6/22/2007
Larry Kaufman writes on customer service vs returns on investment. How shortlines can improve Class I response time to new business rate questions. The DM&E pot continues to boil. Rail freight traffic for the week ending June 15. CTA threatens re-regulation north of the border.Penna RR T&HS places high-speed rail commemorative plaque in Princeton. IAIS runs double-headed steam freights; ex-Reading 2100 arrives in the Tri-Cities for display and ops. UBS on why RR investors may switch to cash flow from PEs.
Week in Review, 6/29/2007
Morgan Stanley’s William Greene writes, “We were surprised again this quarter at the degree of weakness in rail volumes." Take-aways for shortlines. Bear Stearns "more cautious" on shortline fundamentals.
The truckers are still hungry and any perceived rail service lapses or over-reaching rate increases will find shippers heading for the highwaymen. GWR’s Portland & Western will receive some $2.5 mm in Oregon State funds to upgrade 12 miles of century-old track between Hagg Lake and Hillsboro. GWR to exit Mexico.

Connecticut’s Housatonic River Railroad (HRRC) has scored a first: achieves REN certification. Larry Kaufman on the DM&E saga. UBS publishes third annual Short Line Survey. A cautionary note for today's would-be rail regulators from from Jervis Langdon’s President’s Letter from the Rock’s 1967 Annual report.

Chop Hardenbergh takes the other side of the CTA argument. Amtrak and UP agree on track-related service matters. Hank Wolf, Vice Chair and CFO at Norfolk Southern, retires tomorrow after 34 years with the company, having begun his railroad career with the N&W in 1973.

A double issue this week as I'm taking next week off.

THE BLANCHARD COMPANY
2041 Christian Street - Philadelphia PA 19146-1338
Roy Blanchard.215-913-7740 mobile, royblan@icloud.com
Laura Blanchard, email preferred lblanchard@rblanchard.com