Bullish Railroad Stocks Underlie Promising Outlook for Industry

In Midwest Industrial Supply, Inc., Rail & Mass Transit, Rail Lubrication, Railroads by Eric Vantiegham

With railroad stocks hitting all-time highs, industry stakeholders should consider what they can do to solidify their recent gains.

While the transportation sector as a whole has been sluggish over the past few years, railroads continue to demonstrate their importance to U.S. infrastructure as a whole. A number of railroad companies are expected to post strong second-quarter earnings — with most of these earnings hitting all-time highs. To name a few, CSX Corporation, Union Pacific Corporation, Norfolk Southern Corporation, and Kansas City Southern will all release their numbers in the coming weeks. 

These earnings reports are much anticipated, given the significant number of indicators of stellar performance across the sector. With the American economy in a strong position, businesses across all industries have turned to freight rail to handle goods moving across the country and coming through ports of entry. Intermodal freight in particular has been strong, with volumes rising 1% year-over-year.

With soaring railroad stocks underscoring the industry’s vigor in relation to other players in the transportation space, stakeholders might be celebrating their well-deserved success. However, it’s also important to consider what railroad companies can do to solidify their recent gains. By investing in advanced rail maintenance solutions, for example, these operators can channel current performance into enduring success in the future.

Railroads Expected to Post Record Earnings

With major railroad companies preparing to release their Q2 earnings, experts are already calculating what they expect those earnings to be. 

Industry insiders predict that CSX will report earnings per share (EPS) of $1.11 on $3.15 billion in revenues from the second quarter; Union Pacific is expected to announce an EPS of $2.15 on $5.63 billion in Q2 revenues; and Norfolk Southern could post an EPS of at least $2.80 on $2.96 billion in revenue.

What’s Driving This Growth

A range of factors are contributing to these soaring railroad stocks. In addition to the economic recovery of the past 10 years, commodity prices are on the rise — a trend that has provided a wealth of opportunities for the railroad companies that move them from point A to B. Domestic shipping has also grown, allowing American freight rail operators to excel on their own turf.

These factors have all played to railroads’ strengths, allowing companies such as CSX, Union Pacific, Norfolk Southern, and Kansas City Southern to build on the broader economic growth in play. In response to this upsurge in activity driven by market gains, however, railroad operators should consider what they can do to keep their infrastructure in optimal condition. 

How Railroads Can Invest in their Futures

For railroad companies looking to take advantage of strong second-quarter gains, investing in the infrastructure that makes it all possible is a strategic move. Greater demand from frequent use will place added strain on tracks, switches, and more — all of which will require attention from tried-and-true experts. 

Accordingly, railroad operators should invest in innovative rail switch maintenance products — like those built in Midwest Industrial Supply, Inc.’s state of the art laboratory. Since 1975, our team has specialized in solving the most pressing maintenance issues facing rail and mass transit networks. Our patented line of switch lubrication products last longer than traditional graphite, increase train handling and performance, and work in the most extreme environments and climates. 

If you’re interested in learning more about how Midwest’s rail switch lubricants can benefit your rail network, reach out to our experts today. And if you’re interested in a custom application program that empowers our team to handle everything from site surveys and application to ongoing maintenance and more, we’re standing by and ready to help. 

Eric Vantiegham is Midwest’s Rail & Transit Specialist. Skilled in product development, new business development, and strategic planning, he enjoys playing ice hockey and coaching his boys' youth teams.

Contact Us
Thank for your submission. A Midwest Team Member will be in contact with you shortly.