After the initial COVID-19 outbreak slowed freight traffic in the spring, CSX Corp. has seen increased business on its rail lines as the economy recovers.
However, the recent spike in COVID cases in the U.S. is affecting operations, Executive Vice President of Sales and Marketing Mark Wallace said last week.
“We’re dealing with sort of, I don’t know if you call it a second wave, but more cases popping up and that’s affecting our employee population,” Wallace said at an investor conference presented by Robert W. Baird.
“We’re seeing a lot of cases around the network, specifically right now in the Midwest. We’ve seen some hot spots of employees that are having to go out because they’ve got the disease, and so we’re dealing with it,” he said.
Jacksonville-based CSX’s rail network operates throughout the Eastern half of the U.S.
Wallace said CSX learned valuable lessons during the first wave of the pandemic in the spring that are helping the company deal with a resurgence of the virus.
“We dispatched a lot of PPE across the network to ensure that those employees who remained and were working were safe,” he said.
“They masked. They had the sanitizers, everything they needed to continue working in a safe manner.”
Wallace said the company also learned lessons about communicating with customers during the crisis.
“The way we’re working with our customers is impressive, and I think that gives us a lot of confidence,” he said.
The communication included “sitting down with our customers and showing them that we didn’t drop the ball. In some cases, we had some difficult times but that was to be expected,” he said.
Wallace said recent news about COVID vaccines has him optimistic about improving conditions in 2021.
“The news is great news for us and for everybody else,” he said.
“We think, hopefully into the new year, things start to settle down a little bit. We can get back to normal railroading here, but we’re continuing to watch the situation.”
Analyst says CSX a ‘Top Rail Pick’
Credit Suisse analyst Allison Landry on Nov. 16 named CSX as her “Top Rail Pick,” citing the success of its precision scheduled railroading initiative on improving operations.
“The prevailing view for the last year has been that the PSR cost-cutting efforts have largely begun to bottom out,” Landry said in a research note.
“But considering that CSX is the furthest along of its U.S. Class I peers as far as implementation, in conjunction with apparent share gains and recent volume trends that are tracking the furthest above our estimates, we can see a scenario whereby investors start to re-consider the growth narrative – setting the stock up for continued relative outperformance as we head into 2021,” she said.
PNC seeks national footprint with BBVA acquisition
PNC Financial Services Group Inc.’s $11.6 billion agreement to buy BBVA USA Bancshares Inc. is part of a plan to create a national footprint for the Pittsburgh-based banking company, PNC officials said Nov. 16.
“Starting with the RBC acquisition that established our presence in the Southeast, we’ve been consistently focused on expanding into new markets with the ultimate strategic objective of building a national franchise,” PNC Chief Executive Bill Demchak said in a conference call with analysts.
PNC acquired the U.S. banking operations of Royal Bank of Canada in 2012, giving it about 400 branches in six Southeastern states.
“BBVA is going to supercharge these national expansion efforts with its highly attractive and complementary franchise,” Demchak said.
PNC has about 2,200 branches, most in a region between Chicago and New York. Acquiring BBVA adds more than 600 offices in Florida, Texas, Alabama, Arizona, California, Colorado and New Mexico.
BBVA has 43 Florida offices, including 24 in the Jacksonville market, making it the fourth-largest bank in the Northeast Florida market.
PNC has an office in Jacksonville but no bank branches. It has 170 branches in Central and South Florida, with the nearest to Jacksonville in Palm Coast and Gainesville.
PNC said the merger will make it the fifth largest U.S. bank with $564 billion in assets and 2,844 branches.
BBVA, owned by Spain-based Banco Bilbao Vizcaya Argentaria, S.A., changed its U.S. brand name from BBVA Compass to just BBVA last year. It had been using the old name since acquiring Compass Bancshares Inc. in 2007.
Landstar CFO Kevin Stout leaves
Landstar System Inc. said in a Securities and Exchange Commission filing that Chief Financial Officer Kevin Stout stepped down as chief financial officer Nov. 2.
Stout was promoted to CFO at the end of 2014, when then-Chief Financial Officer James Gattoni was promoted to CEO.
The Jacksonville-based trucking company did not give a reason for Stout’s departure as an executive officer. Landstar said Stout will serve as a special adviser to the CEO until December 2021.
Gattoni will serve as principal financial officer of Landstar until a successor is named.
Georgia Senate runoff ads boost TV station revenue
Political advertising reached record levels this year for Tegna Inc., and it’s a gift for the television station operator that keeps on giving.
“As you may have heard, we’re not done” with political ads, Tegna CEO David Lougee said last week in the company’s quarterly conference call with analysts, according to a transcript posted by the company.
“We now have not one, but two, U.S. Senate runoff (elections) scheduled for early January in Georgia, where we have two stations in Atlanta and our strong CBS affiliate in Macon, and the spending has already begun,” he said.
Lougee did not mention Tegna’s two Jacksonville stations, WTLV TV-12 and WJXX TV-25. With Southeast Georgia included in the Jacksonville television market, ads for the Georgia runoffs already are appearing on local stations.
Lougee said Tegna took in $395 million in political ad revenue this year through Election Day, which was 70% higher than the 2018 election season.
That big increase is partially due to acquisitions that increased Tegna’s station count to 63, from 47 during the 2018 election season.
Lougee did not want to make any predictions for the additional spending from Georgia.
“We don’t have, frankly, a good answer other than we know it will be very, very large for obvious reasons,” he said.
The other public company operating Jacksonville television stations, Graham Holdings Co., said third-quarter revenue from its broadcasting division rose 16% to $133.8 million, helped by a $24.8 million increase in political ads.
Graham operates seven television stations, including WJXT TV-4 and WCWJ TV-17 in Jacksonville.
Duos Technologies reports $2.7M loss
Duos Technologies Group Inc. reported a third-quarter loss last week and sharply cut its revenue forecast for the year.
The Jacksonville-based provider of intelligent security analytical technology lost $2.7 million, or 77 cents a share, in the quarter with revenue falling 42% to $1.28 million.
At the beginning of the year, Duos was projecting revenue to grow from $13.6 million in 2019 to $20 million this year.
With some projects delayed, Duos said in a news release it now is expecting revenue between $7.5 million and $8 million for 2020.
“Although uncertainties continue in the macro economic climate, management believes that 2021 will yield a much stronger financial performance for revenue and profitability,” it said.