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CSX Corp. yesterday announced first-quarter 2020 net earnings fell 8 percent to $770 million, or $1 per share, compared to $834 million, or $1.02 per share, in the same quarter last year. The Class I withdrew its outlook for the year because of ongoing economic uncertainty over the COVID-19 pandemic.
Operating revenue fell 5 percent to $2.86 billion during the quarter, as growth in merchandise revenue was more than offset by declines in coal and other revenue. Expenses dropped 7 percent year over year to $1.68 billion, driven by efficiency gains, CSX officials said in a press release.
Operating income slipped 3 percent to $1.18 billion compared to $1.22 billion in the same quarter last year.
The Class I also posted a first-quarter record operating ratio of 58.7 percent, an improvement from 59.5 percent in the prior year.
"I am extremely proud of our outstanding CSX employees for keeping the railroad running at such a high level during these unprecedented times and enabling the delivery of critical goods across the country," said CSX president and Chief Executive Officer James Foote. "Their hard work and dedication over the past few weeks, and throughout our transformation, have put CSX on the strongest footing it has ever been heading into this period of economic uncertainty."
By business group, chemicals revenue was up 6 percent year over year; agriculture and food products, up 6 percent; automotive, down 10 percent; minerals, up 2 percent; forest products, up 2 percent; metals and equipment, up 5 percent; fertilizers, up 2 percent; coal, down 25 percent; intermodal, down 1 percent; and other, down 40 percent.
CSX also posted one of its safest quarters in history, with a 22 percent improvement in the Federal Railroad Administration (FRA) personal injury frequency rate and a 34 percent improvement in the FRA train accident rate during the quarter.
CSX's quarterly results were "solid and reflective of solid progress" under the Class I's precision scheduled railroading (PSR) operating plan, Robert W. Baird & Co. Inc. Senior Research Analyst Benjamin Hartford said in a research report issued today. The railroad's earnings per share was ahead of the firm's consensus estimate, while revenue was in line with expectations.
While the pace and depth of CSX's volume declines in the second quarter remain unknown, the company's progress to date under the PSR operating plan is "impressive, and we view CSX as well-positioned to benefit from eventual recovery in industry volume growth," Hartford wrote.
In a conference call with analysts yesterday, Foote said almost everywhere he turns he is hearing negative news from the railroad's customers, and there is no clear view of when conditions might improve, The Florida Times-Union reported.
The only bright spot is that auto manufacturers might resume production sometime next month.
"I wish I could point to one customer" with positive news, Foote said, according to the newspaper.