(CSX issued the following news release on July 18.)
JACKSONVILLE, Fla. — CSX Corporation today reported second quarter 2006 net earnings of $390 million, or $1.66 per share. Earnings for the second quarter included insurance recoveries related to Hurricane Katrina and benefits associated with the resolution of tax matters with a combined impact of $0.50 per share. Last year’s second quarter earnings were $165 million, or $0.73 per share, which included costs related to a debt repurchase of $0.54 per share, partially offset by a state income tax benefit of $0.31 per share. On a comparable basis, the company’s earnings per share for the second quarter of 2006 were $1.16, a 21 percent increase, compared to $0.96 for the same period last year.
“These financial gains are a result of momentum in our operations, improvements in productivity and service, and our ability to capture price in a strong market environment,” said Michael J. Ward, chairman and chief executive officer of CSX Corporation. “Our strategy remains on track, the team is driving performance, and we are well positioned for profitable growth.”
The company posted record Surface Transportation revenues of $2.4 billion, which represented a 12 percent increase from the second quarter last year. Surface Transportation operating income was $645 million, including the insurance recoveries, compared to $422 million for the same period last year. On a comparable basis, 2006 second quarter operating income was a record $519 million, a 23 percent increase over last year, and reflected an operating ratio of 78.6 percent.
In addition, the company announced its board of directors has approved a 2-for-1 stock split for shareholders and a $0.10 quarterly dividend on the post-split shares, representing a 54% increase. The board also authorized a $500 million share buyback program that the company intends to complete over the next 12 months.
“We are confident in our ability to achieve double digit growth in operating income, earnings and free cash flow over the next five years,” said Ward. “The decision by our board to split our stock, increase the dividend and authorize the share buyback program reflects our strong balance sheet, and follows record operating performance as well as new investments to expand network capacity.”
The stock split will be for all shareholders of record on August 3, 2006 with a distribution date of August 15, 2006.
The $0.10 post-split quarterly dividend on the company’s common stock to shareholders of record as of August 25, 2006, is payable on September 15, 2006.
The new share buyback program is authorized to begin on July 24, 2006. Under the program, the company may purchase shares from time to time on the open market, through block trades or otherwise.
CSX Corporation, based in Jacksonville, Fla., is a leading transportation company providing rail, intermodal and rail-to-truck transload services. The company’s transportation network spans approximately 21,000 miles with service to 23 eastern states and the District of Columbia, and connects to more than 70 ocean, river and lake ports.