(The Florida times-Union posted the following story by Mark Basch on its website on April 30.)
JACKSONVILLE, Fla. — CSX Corp. yesterday reported lower first-quarter operating earnings, as higher fuel costs and weather-related charges offset an increase in revenue.
The Jacksonville-based transportation company said first-quarter earnings, excluding accounting changes that affected earnings this year and last, were $42 million, or 20 cents per diluted share, down from $68 million, or 32 cents a share, in the first quarter of 2002.
Operating revenue rose from $1.96 billion to $2.02 billion in the quarter.
“We’re really encouraged that our revenues are showing a good deal of strength even in a sluggish economy,” said Chairman and Chief Executive Officer Michael Ward in a conference call with analysts.
Ward and other CSX officials in the call expressed hope about economy trends for the rest of the year.
“We’re seeing glimmers of light to give us hope the recovery is coming,” Ward said.
Ward also said that with a better economic outlook, he is optimistic about future earnings because the increases in expenses that affected first-quarter operations of CSX’s railroad were temporary.
“We feel we’re on the right track operationally, no pun intended,” he said.
Higher fuel prices sent fuel expenses up by $50 million in the quarter, although $13 million of those fuel surcharges were passed on to customers. Chief Financial Officer Paul Goodwin also said the severe winter weather in some areas caused an estimated $25 million in additional expenses, included labor and fuel charges.
CSX’s earnings of 20 cents a share, before accounting changes, was 3 cents above the consensus forecast of 17 cents by analysts surveyed by First Call Corp.
Because of new accounting rules, CSX recorded a one-time credit of 26 cents a share that increased final first quarter 2003 net income to 46 cents a share, and it recorded a one-time charge of 20 cents last year that reduced first-quarter 2002 net income to 12 cents a share.
The 2002 earnings were also helped by a gain of 11 cents a share on a real estate transaction.