Subscribe to our free, weekly email newsletter!


CSX reports mixed fourth quarter earnings results

By Jeff Berman, Group News Editor
January 16, 2014

Last night, Class I railroad carrier CSX reported fourth quarter earnings of $426 million-or $0.42 per share-which was down 5.2 percent annually from $449 million and $0.44 per share a year ago and was down slightly was Wall Street estimates of $0.43 per share.

The Jacksonville, Fla.-based carrier said quarterly operating income of $3.032 billion was up 5 percent annually and paced by its merchandise and intermodal business units. And quarterly operating income–at $813 million-dipped 2 percent year-over-year. CSX officials said that overall quarterly operations were “resilient” in spite of increase volume and harsh weather at the end of the quarter.  For all of 2013, revenue rose 2.0 percent to a record $12.0 billion, with earnings per share at $1.83, up slightly from $1.79 in 2012.

Total second quarter volume was 1.662 million total units, representing a 6 percent annual gain. Intermodal was up 11 percent at 666,000 units, and chemical and automotive and agricultural products loadings at 137,000, 113,000, and 113,00 were up 18, 4, and 2 percent, respectively. Coal was down 5 percent at 289,000. Total merchandise was up 7 percent at 707,000 units.

“Revenue grew 5 percent in the quarter, with the ongoing headwinds from coal more than offset by broad-based growth in the merchandise and intermodal markets,” said Michael Ward, CSX President and CEO, on an earnings call earlier today. “This reflects an economy that is expanding. While we had a solid quarter from a top line and operational perspective, you can see that the revenue growth did not flow through to the bottom line as much as we would have liked. That is because there were a number of moving parts on the expense side between 2013 and 2012 that reduced the normal flow through we would have expected from the $137 million revenue gain.”

Based on fourth quarter volumes, Clarence Gooden, CSX executive vice president, sales and marketing, said on the call that growth in the merchandise and intermodal markets was partially offset by a decline in coal volumes and as a result merchandise and intermodal now account for 83 percent of total CSX volume and more than 75 percent of total revenue.

Revenue per unit for the quarter¬–at $1,824–was relatively flat, with the impact of core pricing gains and liquidated damages partially offset by the unfavorable mix impact related to the growth in intermodal versus the decline in coal, he said.

And Gooden said pricing on a same-store basis remains solid across nearly all markets served by CSX. CSX defines same-store the same-store sales as shipments with the same customer, commodity and car type, and the same origin and destination.

Core pricing for the quarter was 1.6 percent, which was even with the fourth quarter of 2012, which Gooden said reflects continued rate pressure in the export coal market and more modest increases in domestic coal pricing.

Looking to the first quarter of this year, Gooden was optimistic.

“We see favorable to stable conditions in 90 percent of our markets, and the overall volume outlook for the first quarter is positive,” he said. “Agricultural is favorable, with higher year-over-year crop yields supporting continued growth in grain shipments. The outlook for the automotive market is also favorable as North American light-vehicle production continues to grow. We expect growth in chemicals as we continue to capture opportunities created by the expanding oil and gas industry.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement (NAFTA) partners Canada and Mexico increased 8.2 percent from September 2013 to September 2014 at $102.2 billion.

NS said that the D&H lines it plans to acquire connect with the NS network at Sunbury, Pa. and Binghamton, N.Y. and give NS single-line routes from Chicago and the southeast U.S. to Albany, N.Y., which is in close proximity to NS’ Mechanicville, N.Y.-based intermodal terminal.

This follows a 1.6 cent decrease last week, which was preceded by a 5.4 gain the week before and stands as the first increase going back to the week of June 23, when the weekly average headed up 3.7 cents to $3.919 per gallon.

BNSF said that its 2015 capital expenditures will be allocated towards various areas of its business, including maintenance and expansion of the railroad to meet the expected demand for freight rail service, with 2015 representing the third straight year BNSF has invested a record annual capital expenditures investment.

While the ongoing labor negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) ostensibly going from bad to worse, following the ILWU’s announcement late last week that it was halting negotiations from November 20 through November 30, a Congressional group last week penned a letter to PMA and ILWU leadership expressing concern over the state of the negotiations.

Article Topics

News · Intermodal · Railroad Shipping · CSX · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA