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Citing weaker-than-expected carload and intermodal volumes so far this year, Stifel Nicolaus analyst John Larkin recently lowered his 2009 and 2010 earnings-per-share (EPS) expectations by an average of 11.7 percent and 11.9 percent, respectively, for the six major Class Is.

On a percentage basis, Larkin lowered Canadian Pacific’s EPS the most — 23.9 percent — for this year, to $2.55 from $3.55; BNSF Railway Co.’s the least, by 3 percent — from $4.95 to $4.80.

In a March 17 research note, Larkin also wrote that Stifel Nicolaus had adjusted its pricing assumptions for the six railroads to be “slightly less robust,” with annual rail carload pricing now likely to end up in the 4.5 percent to 5.5 percent range “with flattish intermodal pricing.” In addition, investors appear to the folks at Stifel Nicolaus to have “overreacted to re-regulation concerns and the potential for increased pricing competition on carload traffic.”

Ultimately, the firm believes that railroad volume comparisons “will continue to get progressively less negative as 2009 unfolds,” and that this “orbital improvement” likely will attract “incremental attention” from investors in the months ahead.

— By Desiree J. Hanford. A Chicago-based free-lance writer, Hanford covered the equities market, including transportation, for Dow Jones & Co. for 10 years.