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Rail News: CSX Transportation

CSX: Quarterly revenue rises but labor, asbestos-claim expenses pinch income performance

Similar to Union Pacific Railroad, CSX Corp. increased quarterly operating revenue, earning $1.9 billion compared with $1.8 billion in second-quarter 2002.

However, several factors eroded the railroad's second-quarter financials. Previously announced expenses of $17 million related to asbestos claims filed in West Virginia and $11 million in contract-dispute settlements held down quarterly operating income to $259 million compared with $293 million in second-quarter 2002.

Also, quarterly net earnings dropped to $127 million compared with $135 million, and the railroad's quarterly operating ratio worsened 2.3 points to 86.3.

"We continued to see strong revenue growth in the quarter, and have successfully converted more than 1 million truckloads from the highway to our railroad since the beginning of 2001," said CSX Chairman and Chief Executive Officer, and CSX Transportation President Michael Ward in a prepared statement. "However, we continued to be challenged by slowed operations as the railroad struggled to recover from a difficult operating environment during the early parts of the quarter. Reduced network fluidity
caused a significant increase in labor expenses, partially offsetting the strong revenue gains."

During the year's first half, CSX earned $3.9 billion in operating revenue compared with $4 billion during a similar 2002 period, and $462 million in operating income compared with $533 million last year.

Contact Progressive Railroading editorial staff.

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