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Rail News Home CSX Transportation

7/19/2006



Rail News: CSX Transportation

CSX sets revenue and income records, lowers operating ratio in second quarter



CSX Corp.’s winning streak has reach double digits. For the 10th-straight quarter, the company has registered financial gains, particularly in its surface transportation business.

Yesterday, CSX reported second-quarter net earnings of $390 million or $1.66 per share — more than double second-quarter 2005 earnings of $165 million or 73 cents per share. The most recent quarter included insurance recoveries associated with Hurricane Katrina and the resolution of tax issues, which boosted earnings 50 cents per share.

Quarterly surface transportation revenue reached a record $2.4 billion, up 12 percent compared with the same 2005 period. Surface transportation operating income of $645 million — which included insurance recoveries — rose more than 50 percent. On a comparable basis, operating income increased 23 percent to a record $519 million.

“We continue at record-setting paces,” said CSX Chairman, President and Chief Executive Officer Michael Ward during a second-quarter earnings conference this morning. “The transportation environment remains robust.”

CSX also drove down its quarterly surface transportation operating ratio, which improved 7.1 points to 73.4 compared with second-quarter 2005.

“We will continue to work toward our long-term goal of an operating ratio in the mid-70s,” said Executive Vice President and Chief Financial Officer Oscar Munoz.

On the cost side, total surface transportation expenses remained flat at $1.8 billion despite a 64 percent hike in fuel costs compared with second-quarter 2005. But a $126 million gain on insurance recoveries offset rising expenses in several categories.

During the year’s first half, surface transportation expenses totaled $3.6 billion, up about 3 percent compared with the same 2005 period. Surface transportation revenue rose 11 percent to $4.8 billion, operating income increased 50 percent to $1.1 billion and CSX’s first-half operating ratio improved 5.7 points to 76.2.


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