(The Associated Press circulated the following on March 18.)
NEW YORK — Several analysts raised earnings expectations for railroad operator CSX Corp. after the railroad operator raised its first-quarter and full-year forecasts, touting strong pricing and improved efficiency.
Bear Stearns analyst Edward Wolfe said he believes the increased earnings predictions indicate management’s “increased confidence” in the rail’s overall operations as well as an expectation for improving volumes in the key grain, coal and metal segments. He raised his 2008 earnings expectations by 17 percent.
Longbow Research analyst Lee Klaskow also raised his earnings predictions for 2008, noting the Jacksonville, Fla., company should benefit from the re-pricing of some long-term contracts this year and increased coal exports abroad.
“Clearly CSX is operating on all cylinders,” Klaskow said. “We believe the company is successfully executing on its turnaround, and it appears to us management is over the hump.”
Klaskow said that while he believes CSX is “on the right path,” he suggested the ongoing battle between the railroad and two activist shareholder hedge funds will impact the company in the future, and “continues to be a distraction for management.”
Shares closed up nearly 5 percent Monday as the broader market was stirred by investor’s reaction to a government-backed takeover of investment firm Bear Stearns Cos. and an emergency rate cut by the Federal Reserve.