Zacks Industry Outlook Highlights: Kansas City Southern, CSX, Canadian National Railway, Canadian Pacific Railway, Norfolk Southern and Rail America

For Immediate Release

Chicago, IL – June 16, 2010 – Today, Zacks Equity Research discusses the U.S. Rail Industry, including Kansas City Southern (KSU - Analyst Report), CSX Corporation (CSX - Analyst Report), Canadian National Railway (CNI - Analyst Report), Canadian Pacific Railway (CP - Analyst Report), Norfolk Southern (NSC - Analyst Report) and Rail America (RA - Snapshot Report).

A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/35617/U.S.+Rail+Industry+Outlook+-+June+2010.

With the economy now out of the recession, the fortunes of the railroad industry are also on the mend. The overall sentiment with respect to railroads is clearly improving, with total traffic for the 17th week of 2010 increasing 15.0%, preceded by a traffic increase of 14.8% year-over-year in the 16th week, 16.1% in the 15th week and 17.2% in the 14th week. The volumes grew steadily due to a pick-up in end market demand. Moreover, structural cost cuts during the downturn are expected to help railroads generate high incremental margins.

One railroad company that we like with a Zacks #1 Rank (Strong Buy) is Kansas City Southern (KSU - Analyst Report), which has great momentum. Its capital position improved with increased liquidity and reduced leverage, followed by the recent equity issuance. Management expects double-digit growth in fiscal 2010, with volume growing in the mid- to high-single digits along with growth in revenue yield. We are optimistic about new business wins and growth prospects for fiscal 2010 and beyond, given the overall improvement in the economy.

Another of our picks is CSX Corporation (CSX - Analyst Report), which looks attractive based on the its earnings power, pricing power, potential improvements in network fluidity, cost controls, probable improvements in safety and fewer distractions. Cost-cutting efforts undertaken during the past few years will now accrue to the earnings. Steady pricing, improving volumes and cost saving efforts will likely help the company to outperform its peers in the near term.

Canadian National Railway (CNI - Analyst Report) is also poised to benefit from the eventual rebound in the economy as suggested by the recent volume gains.

Elsewhere, we are Neutral on Canadian Pacific Railway (CP - Analyst Report), Norfolk Southern (NSC - Analyst Report) and Rail America (RA - Snapshot Report). Our Neutral recommendations for these operators primarily reflect the lack of near-term earnings momentum in their businesses.

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Read the full analyst report on KSU

Read the full analyst report on CSX

Read the full analyst report on CNI

Read the full analyst report on CP

Read the full analyst report on NSC

Read the full analyst report on RA