|Bid||169.08 x 1300|
|Ask||169.15 x 800|
|Day's Range||169.15 - 171.85|
|52 Week Range||168.41 - 209.43|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.11|
|Expense Ratio (net)||0.43%|
CSX Corporation’s (CSX) rail traffic volumes grew 2.3% YoY (year-over-year) to 129,960 units in Week 49 mainly driven by improved intermodal and carload performances.
With a market capitalization of $36.6 billion, Delta Air Lines (DAL) is the largest airline company in the United States. Disciplined capacity enhancement, efficient cost management, and a low fuel price environment helped Delta grow its profitability in the last few years.
After registering a 0.5% rail traffic decline in Week 48, Kansas City Southern (KSU) made a remarkable turnaround. The company’s total rail traffic increased 6.7% YoY (year-over-year) in Week 49 to 46,780 units from 43,855 units in the same week last year. The company registered YoY growth in both carload and intermodal traffic.
The iShares Transportation Average ETF (CBOE: IYT) is down more than 5% year-to-date, but the downtrodden transportation could be ready to trend higher. Transportation stocks were expected to benefit from lower oil prices and while that has been the case for airline stocks, other industry groups represented in IYT, including railroads. Going forward, the allure of infrastructure investing, which investors can easily engage in via exchange traded funds, could and should rise as governments around the world finally commit the capital necessary to upgraded dated and dangerous bridges, pipelines and roads.
CSX’s (CSX) rail traffic volume grew 1.5% YoY to 128,821 units mainly driven by robust intermodal growth, partially offset by a decline in carload traffic. In the first 48 weeks of 2018, the company recorded a 1.3% YoY increase in railcar traffic. However, CSX’s rail traffic gains were lower than US railroad (IYT) companies’ 3.7% gain during the same period.
Delta Air Lines (DAL) is the largest airline company in the United States, in terms of market capitalization, at $38.9 billion. The low fuel price environment, efficient cost management, and disciplined capacity enhancement helped Delta grow its profitability in the last few years.
Since the beginning of 2018, Delta Air Lines (DAL) has been focusing on route alignment and capacity addition. In November, the company increased its capacity 3.8% YoY (year-over-year). YTD (year-to-date) as of November, Delta Air Lines’ capacity has risen 3.4% YoY. The YTD growth is significantly higher than the capacity growth of 1% in 2017.
Since mid-October, the market has been bearish on oil prices. The sanctions levied by the US government on Iran have been softer than expected. Earlier, analysts expected stricter sanctions by the Trump Administration on Iran. Analysts expected a massive crude oil supply crunch. However, the US gave temporary waivers to eight countries, including China and India—the major importers of Iranian oil.
Oil prices have been on the upswing since the beginning of 2018 through early-October. As oil expenses make up a significant cost for air carriers, rising oil prices hurt airlines’ profitability as well as their share prices.
This year so far, airline stocks have been battered on concerns of rising fuel prices and overcapacity—with the exception of United Continental (UAL) and Spirit Airlines (SAVE). The two stocks have generated massive returns of 37.8% and 13.4%, respectively, year-to-date (or YTD), significantly outperforming the returns of the SPDR S&P 500 ETF (SPY). The ETF has lost 0.7% of its value.
This year so far hasn’t gone well for the entire airline (IYT) industry. Almost every air carrier has registered a decline in its share price, with a few exceptions—such as United Continental (UAL), which has risen 37.8% year-to-date or YTD.
Oil prices surged continuously from the beginning of 2018 through mid-October. Because oil expenses are a significant cost for airlines, rising oil prices hurt airlines’ profitability as well as their share prices.
American Airlines (AAL) is the largest airline company in the United States in terms of fleet size. The year so far has not gone well for the entire airline (IYT) industry, with almost every air carrier having registered a decline in its share price, except a few—such as United Continental (UAL). However, American Airlines stock has been the worst performer among its top peers YTD (year-to-date). American Airlines has fallen 29.4% YTD, followed by Southwest Airlines’ 19.7% fall.
In the first nine months of 2018, American Airlines’ (AAL) traffic (revenue passenger miles) grew 2.7% YoY (year-over-year)—higher than its capacity growth of 2.2% during the same period. The company’s traffic growth has exceeded its capacity growth rate in two of the last three quarters.
Oil prices rose continuously from the beginning of 2018 through early October. Because oil expenses make up a significant cost component of airlines, increasing oil prices hurt airlines’ profitabilities as well as their share prices.
United Continental (UAL) has a consensus rating of ~2.12 from analysts polled by Thomson Reuters. There’s a consensus “buy” opinion on the stock. There has been an upward shift in analysts’ recommendations for United Continental after its third-quarter results and upbeat guidance for 2018. Before the company’s third-quarter earnings were released, five analysts recommended a “strong buy” on United Continental stock.
Southwest Airlines’ (LUV) traffic or RPM (revenue passenger miles) growth has lagged the capacity or ASM (available seat miles) growth rate in the last two quarters. In the third quarter, the company’s RPM grew 2.7% year-over-year, which lagged the capacity growth rate of 3.9%. The company’s traffic growth has been lagging the capacity growth for the past six months.
Canadian National Railway (CNI) recorded ~10.3% YoY (year-over-year) growth in its Week 42 carload traffic. Canada’s largest rail freight carrier hauled ~70,100 railcars excluding intermodal volumes in the week compared to ~63,600 units in the corresponding week last year.
Berkshire Hathaway–owned BNSF Railway (BRK.B) reported a 2.7% YoY (year-over-year) rise in its Week 42 carload traffic. The railroad company moved ~103,600 railcars except for intermodal units in the week compared to ~100,900 units in Week 42 of 2017.
In the third quarter, the Coal segment contributed 15.7% to Norfolk Southern’s (NSC) total operating revenue, down 110 basis points from 16.8% in the third quarter of 2017.
Previously in this series, we looked at United Parcel Service’s (UPS) revenues and its growth in the third quarter. Here, we’ll review the company’s segmental results, starting with its US Domestic Package segment.
In the third quarter, United Parcel Service (UPS) marginally missed its Thomson Reuters–surveyed analysts’ revenue estimate of $17.49 billion. The company’s reported revenues of $17.44 billion in the quarter rose 7.9% YoY (year-over-year) from $16.1 billion in the third quarter of 2017.