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Rail News: CSX Transportation

CSX posts record first-quarter earnings


CSX Corp. yesterday announced first-quarter 2018 earnings that surpassed analysts' estimates and a profit that nearly doubled compared with a year ago, as the Class I continued to cut costs and advance its scheduled railroading model.

CSX reported record Q1 2018 net earnings of $695 million, or 78 cents per share, compared with $362 million, or 39 cents per share in the same quarter last year.

The railroad's operating ratio for the quarter improved to 63.7 percent from 73.2 percent in Q1 2017, CSX officials said in a press release.

"CSX employees did a great job of running the railroad and executing the scheduled railroading model during challenging weather conditions," said President and Chief Executive Officer James Foote. "We're more confident in our ability to deliver safe, reliable, best-in-class service for our customers and enhanced value for our shareholders."

Revenue in the quarter remained relatively flat at $2.88 billion, while expenses declined 13 percent year over year or 8 percent when excluding prior year restructuring charges to $1.8 billion. Operating income jumped 36 percent to $1.04 billion from $769 million a year ago.

"Since implementation of scheduled railroading began in March 2017, CSX has taken significant strides to transform the organization and to make CSX more competitive," said Foote. "Our company's operating model provides substantial opportunities to leverage our service product offering, capture growth and deliver superior financial returns."

By commodity group, CSX announced the following Q1 revenue results compared with the same period a year ago:
• Chemicals declined 2 percent due to reduced fly ash, plastics and energy-related shipments;
•  Automotive, impacted by lower North American vehicle production, dropped 4 percent;
• Ag and food products' 8 percent decline centered on ethanol and export grain;
• Fertilizer declines of 10 percent were driven by closure of a customer facility and weather impacts;
• Domestic coal's 4 percent decline was somewhat offset by a favorable export coal market environment;
• Intermodal's 3 percent increase was led by strong international service growth; and
• Other revenue increases were driven by demurrage, liquidated damages and other factors.

In its 2018 financial outlook, CSX said it:
• expects revenue to be up slightly, with positive momentum heading into the second quarter;
• continues to drive service improvements — the railroad is no longer required to have weekly calls to discuss service issues with the Surface Transportation Board; and
• expects a solid step down in the operating ratio this year.

CSX's Q1 2018 earnings of 78 cents per share were "well ahead of our 65 cents per share consensus-matching estimate," wrote Benjamin Hartford, senior research analyst at Robert W. Baird & Co. Inc., in an analyst's report issued this morning.

Contact Progressive Railroading editorial staff.

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