Railroad shipping: CSX reports record third quarter earnings

As it has done many times in the past, Class I railroad carrier CSX led off the rail earnings season with a strong performance, reporting record-setting third quarter earnings of $506 million and $0.43 per share.

This was a 19 percent annual gain and matched Wall Street estimates for earnings per share.

Quarterly operating income at $878 million was up 6 percent, and quarterly revenue at $2.963 billion was up 11 percent.

Volume growth was again strong for CSX overall in the third quarter, with total volume at 1,619 million total units for a 1 percent gain over 2010. Automotive loadings were up 4 percent, and agricultural products were down 89 percent, and chemicals were up flat. Total merchandise was up 2 percent at 657,000 units. Coal was down 1 percent at 386,000 units, and intermodal was flat at 576,000 units.

“These [earnings] results reflect the compelling value of freight rail transportation and recoveries associated with higher fuel costs,” said Michael Ward, CSX President and CEO, on an earnings call earlier today. “The underlying fundamentals of our business continue to support our aspirations for the future. In the near-term, that means the continuation of steady volume growth and volume performance. Longer-term, the outlook for freight rail transportation remains attractive as the population grows and the need for cost-effective and environmentally-friendly transportation solutions becomes even greater.”

Although positive trends are continuing in the economy, they are occurring at a more moderate pace, said Clarence Gooden., CSX executive vice president, sales and marketing, on the call.

Gooden explained that through discussions with conversations with customers, coupled with key leading indicators, signs point to growth in most of the markets CSX serves.

“Transportation demand in the markets we serve continues to support profitable growth,” said Gooden.

Quarterly volume increases drove $20 million in annual revenue growth, with the combined effect of rate and service mix accounting for $153 million in revenue increase, reflecting yield gains across all markets.

Same stores sales pricing increased 7.1 percent and continues to outpace rail inflation, which is currently forecasted at 4.2 percent for the year. These sales represent 75 percent of CSX’ traffic base, said Gooden.

Same store sales are defined as units with the same customer, commodity, and car type and at the same origin and destination.