Sector Snap: Analyst sees bumpy road for rails

NEW YORK (AP) — A Citi Investment Research analyst initiated coverage of the railroad sector Friday, warning that deteriorating shipment volume will hamper earnings among some in the group.

The railroads have enjoyed strong pricing and booming earnings growth since earlier this decade, when the industry was consolidated. But as the recession takes hold, shipments have slowed to levels not seen in 50 years, according to analyst Matthew Troy.

This staggering falloff in demand will likely drag down earnings per share this year, he said, as railroads struggle to maintain revenue growth while still making investments in infrastructure. ...