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CSX Corp. yesterday reported fourth-quarter 2017 revenue declined 6 percent to $2.86 billion compared with a year ago, as the Class I hauled less freight during the period.The company posted net earnings of $4.1 billion, or $4.62 earnings per share, compared with $458 million, or 49 cents per share in Q4 2016. The 2017 earnings include a $3.6 billion net tax reform benefit under the recently passed Tax Cuts and Jobs Act of 2017, as well as a $10 million net restructuring charge.Excluding the tax reform benefit and restructuring charge, adjusted net earnings for the quarter were $573 million, or 64 cents per share, CSX officials said in a press release.Fourth-quarter 2017 revenue also was impacted by an extra fiscal week in 2016 in the company's reporting calendar.Expenses for the quarter declined 14 percent compared with the year-ago period. CSX posted Q4 2017 operating income of $1.12 billion, a 12 percent increase over Q4 2016.The Class I logged an operating ratio of 60.9 percent in the fourth quarter compared with 67 percent a year ago.CSX's performance continued to strengthen during Q4 2017 by building on the scheduled railroading model that President and Chief Executive Officer E. Hunter Harrison implemented during his eight-month tenure at the company, said James Foote, who was appointed president and CEO after Harrison's death last month.For full-year 2017, CSX reported earnings per share of $5.99, operating income of $3.7 billion and an operating ratio of 67.9 percent. Adjusted for the impacts of the new tax law and the company's restructuring charge, adjusted earnings per share were $2.30, adjusted operating income was $3.9 billion and adjusted operating ratio was 66.3 percent for full-year 2017.CSX continued to show a "sequential improvement" on key service metrics including train velocity and terminal dwell during the fourth quarter, Foote said during a conference call with analysts.He also expressed confidence in continuing to implement the scheduled railroading model that Harrison started at the company."After spending my entire career in the railroad business, I have experienced firsthand the benefits that are realized by customers and shareholders and changing to the scheduled railroad way of doing business," he said.To emphasize that message, among his first acts as CEO was to advise the head of engineering to bulldoze the Atlanta hump yard, which Harrison had closed."The Atlanta hump yard today is flat," Foote said. "There is no turning back. I did make changes to the sales and marketing structure to simplify the organization by collapsing the leadership group into three business units and aligning certain functions into other departments." He also implemented changes in the operating department at staff and field levels in order to pursue efficiencies and service improvements under scheduled railroading.Foote said his biggest change to date was bringing in Edmond Harris to assist as executive vice president of operations. Foote knew Harris when they both worked for Harrison when he was CEO at CN."He understands what we are trying to accomplish at CSX and I trust with Ed's help we can deliver on the plan," Foote said.Meanwhile, CSX's Q4 EPS was ahead of consensus expectations on better than expected improvement in its operating ratio, Robert W. Baird & Co. analyst Benjamin Hartford wrote in an investors' note today.Execution on the company's operations restructuring to the precision scheduled railroading format "has improved meaningfully" since mid-third-quarter of 2017, he wrote.
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