(Source: CSX press release, July 18, 2017)
JACKSONVILLE, Fla. — CSX Corporation (CSX) today announced second quarter 2017 net earnings of $510 million, or $0.55 per share, up from $445 million, or $0.47 per share, in the same period of last year. Excluding a $122 million restructuring charge in this year’s second quarter results, adjusted earnings per share was $0.64 as shown in the table at the link above.
“We are implementing Precision Scheduled Railroading on an expedited timetable, converting switching operations, balancing the network, streamlining resources and getting more out of our assets,” said E. Hunter Harrison, president and chief executive officer. “Although there still remains a lot to be done, we are confident that these initiatives will drive improved customer service, greater resource efficiency and superior shareholder value.”
Revenue for the second quarter increased 8 percent when compared to the previous year, with growth across nearly all markets. This growth was primarily driven by coal-related gains, strength in core pricing and volume across the other markets, and increased fuel recovery.
In the second quarter, CSX delivered improved asset utilization, cost control and fuel optimization. These operational improvements, coupled with the benefits from the management restructuring that was completed early in the second quarter, drove $90 million in efficiency gains. These gains more than offset the cost of inflation in the quarter.
CSX is intensely focused on implementing Precision Scheduled Railroading throughout the system. The company is on track to achieve record efficiency gains and a step-function improvement in its key financial measures for the year given continued economic growth and stable coal markets.
Adjusting for restructuring charges, CSX continues to expect to drive a full-year operating ratio in the mid-60s, earnings per share growth of around 25 percent off the 2016 reported base of $1.81, and free cash flow before dividends of around $1.5 billion (please see the company’s non-GAAP statements at the link above).
As a result, the Board authorized an additional $500 million for the current share repurchase program, which now totals $1.5 billion. As part of this program, nearly $500 million of company shares were repurchased in the second quarter. At the same time, the company is currently evaluating its cash deployment strategy with respect to capital structure and shareholder distributions, and is committed to an investment grade rating.