CSX posts strong third quarter earnings results

Class I railroad carrier CSX yesterday reported third quarter net earnings of $463 million and $0.46 per share, which was up 1.7 percent annually and beat Wall Street estimates of $0.43 per share.

Quarterly operating income at $854 was flat annually and revenue at $3 billion was up roughly 3 percent. CSX said that the strong quarterly revenue was due largely to higher volume and pricing gains in merchandise and intermodal that offset ongoing coal revenue declines. And it added that its net earnings was supported by strong operating results and higher revenues that included benefits from customer contract settlements

Total second quarter volume for the Jacksonville, Fla.-based railroad carrier was roughly 1.643 million total units, representing a 3 percent annual gain. Intermodal was up 6 percent at 657,000 units, and chemical and automotive loadings at 132,000 and 101,000 were up 12 and 1 percent, respectively. Coal was down 7 percent at 310,000. Total merchandise was up 5 percent at 687,000 units.

“As the energy markets continue to evolve, our business mix is increasingly favoring merchandise and intermodal movements,” said CSX President, Chairman, and CEO Michael Ward on an earnings call today. “The team is effectively managing this change by capitalizing on the modest growth in the economy and by focusing relentlessly on safety, service improvement, and asset efficiency. These are important drivers of our foundation for long term profitable growth.”

Quarterly revenue per shipment for CSX was up 1 percent to $1,825, with the impact of core pricing gains and liquidated damages partially offset by the unfavorable mix impact related to growth in intermodal versus the decline in coal, according to Clarence Gooden, CSX EVP, sales and marketing.

Gooden added that core pricing on a same-store sales basis remained solid across nearly all markets, noting that same-store sales are defined as shipments with the same customer, commodity, and car type, and the same margin and destination. These shipments represented 78 percent of CSX’s traffic base for the quarter, he said.

“All-in core pricing was 1 percent in the quarter, down from 1.5 percent in the same quarter last year, reflecting continued rate pressure in the export coal market and more modest increases in domestic coal pricing,” said Gooden.