All fields are required.
"One of the worst winters on record" hindered productivity and drove up operating costs, and as a result greatly impacted CSX Corp.'s financial performance in the first quarter, senior executives said this morning during the Class I's Q1 earnings conference.Although revenue rose 2 percent to $3 billion and volume increased 3 percent to 1.6 million units, net earnings fell 14 percent to $398 million, earnings tumbled 11 percent to 40 cents per share, operating expenses climbed 9 percent to $2.3 billion and CSX's operating ratio ballooned 5.2 points to 75.5 compared with first-quarter 2013 results.The severe winter weather — which impacted the railroad's operations as far south as Georgia — drove up operating expenses by an additional $90 million, or 6 cents per share, including $35 million for labor/fringe costs, $35 million for materials/supplies costs, $15 million for fuel costs, and $5 million for equipment and rent costs, senior execs said. In addition, the weather impacted revenue contribution by 2 cents to 3 cents per share.Despite a quarter that was more challenging than most, "the dedicated men and women of CSX worked tirelessly to keep the network running as fluidly as possible," said Chairman, President and Chief Executive Officer Michael Ward."Thanks to the hard work of our employees, service levels are gradually recovering and we are capitalizing on an economy that continues to show positive momentum," he said, adding that domestic coal demand that had hit a low point in 2013 is projected to strengthen through 2014.The harsh winter "masked the underlying strength of the economy," as CSX's merchandise revenue rose 4 percent to nearly $1.8 billion and volume ratcheted up 2 percent to 680,000 units, and intermodal revenue increased 4 percent to $421 million and volume climbed 5 percent to a new Q1 record 647,000 units, said Executive Vice President and Chief Sales and Marketing Officer Clarence Gooden. Coal revenue declined 9 percent to $662 million and volume dipped 1 percent to 293,000 units, primarily because of soft export coal demand.The winter that reached near historic proportions in terms of duration, snow and ice, and produced 25 storms that hit back to back over several months, wreaked havoc with CSX's network performance in the quarter, said EVP and Chief Operating Officer Oscar Munoz. Comparing first-quarter 2013 data with first-quarter 2014 figures, on-time originations fell from 91 percent to 63 percent, on-time arrivals plunged from 85 percent to 51 percent, train velocity declined from 23.4 mph to 20.8 mph and terminal dwell time rose from 22.2 hours to 26.8 hours.The encouraging news: Performance metrics are stabilizing and starting to improve, said Munoz. In addition, CSX no longer is reeling from the operating cost hikes associated with higher overtime pay, additional locomotives pulled from storage or leased, or other operational impacts associated with the severe winter. However, it's unlikely CSX will achieve a targeted $130 million in productivity gains in 2014, primarily because some weather cost impacts have lingered into the second quarter, said Munoz.Looking ahead, CSX expects modest full-year earnings growth for 2014 on the strength of broad-based merchandise and intermodal gains, and an improving domestic coal environment, said Ward. The Class I still expects to sustain double-digit earnings growth in 2015 and beyond, and achieve a mid-60s operating ratio longer term.
LACMTA recommends Skanska joint venture for Regional Connector design/build contract »
SFMTA OKs two-year budget that expands Muni service »
Foxx's 'Invest in America' tour includes stop at NS intermodal facility in Ohio »
Ontario officials reveal $29 billion plan for transportation investment »