Thursday, May 3, 2007

RAIL Earnings

Yesterday morning RAIL earnings came out, they were $1.80 per diluted share on sales of $322.5 million. Analysts were expecting earnings of $1.67 per diluted share. More importantly, as I noted in my last week's post, orders for new railcars continue to dip. This is from their Press Release:

"Orders for new railcars totaled 768 units in the first quarter of 2007, compared with 2,199 units ordered in the fourth quarter of 2006 and 1,031 units ordered in the first quarter of 2006. The backlog of unfilled orders was 6,006 units at March 31, 2007, compared with 9,315 units at December 31, 2006, and 17,794 units at March 31, 2006."

Also there was a significant jump in Accounts Receivable (6x) quarter over quarter but that could be a seasonality issue since there was almost a 4x jump in Accounts Receivable in the same quarter last year quarter over quarter.


Anonymous said...

I read your report on Yahoo Finance about how you feel RAIL will drop in profits and the industry is slowing. As you stated in your article, the majority of the cars that they are selling are cars that haul coal. If you did your research correctly, yes volumes for the railroad are down but it is the COAL industry that is keeping most of the railways afloat at this point. My personal opinion is that RAIL will have record earnings again this quarter and will continue to keep posting these record earnings until USA citizens stop using energy.... so, that could be a while couldn't it?

Alex Shadunsky said...

That obviously is not going to happened. That is not the reason I am bearrish on RAIL. First, railroads have been getting more efficient in using their railroads. That has lessened the demand of railcarts. Second, when the economy starts slowing down, companies that lease/purchase railcarts will not be actively seeking to upgrade their fleets, and the increased interest rates plays a big role in their decision.

Thanks for stopping bye.