Railroad Industry Snapshot: Cost Reduction In Focus Amid Top Line Pressure
The railroad industry is experiencing top line pressure, with three prominent rail companies covered by Trefis expected to report a decline in revenue in 2016. This is largely due to a decline in shipments, mostly due to a sharp decline in coal shipments, due to weakness in demand for coal by utilities as a result of soft natural gas prices. In addition, weak oil prices have also adversely affected these companies’ fuel surcharge revenues. With declining revenues, rail companies have focused on cost reduction. Due to a combination of volume-related cost reduction and improvements in productivity, all three rail companies are expected to report better EBITDA margins this year as compared to last .
Have more questions about Union Pacific? See the links below.
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