(The following story by Timothy J. Gibbons appeared on the Florida Times-Union website on April 17.)
JACKSONVILLE, Fla. — CSX Corp.’s first quarter earnings were down a penny per share from a year ago, as rising expenses cut into record revenues of $2.4 billion.
The bottom line was most affected by a jump of $81 million in materials, supplies and other expenses, a category that includes $28 million in charges related to derailments of the company’s trains during the quarter.
CSX saw a slew of accidents during the first quarter, prompting harsh comments from politicians in New York – where several of the accidents happened – as well as federal regulators.
The charges left the company with net earnings of $240 million, or 52 cents a share, down 2 percent from the year-ago quarter’s $240 million, or 53 cents a share.
That figure includes earnings of $18 million, or 2 cents per share, in insurance payouts from claims related to Hurricane Katrina.
These results missed analyst expectations of 53 cents per share earnings, although they surpassed the expected $2.38 million in revenue
The company saw volume in its core surface transportation business drop 4 percent.
However, based on what CSX Chief Executive Officer Michael Ward called in a statement “very strong earning power in the face of modest economic headwinds” the company managed to push revenue up 4 percent for the quarter.
Particularly hard hit were the automotive and construction sectors, which have been dropping for several quarters.
Surface transportation’s operating ratio, a metric used to gauge how efficiently the company is operating, inched upward to 79.9 after a year in which the Jacksonville-based railroad got it down to 77.8, meeting its long-term goal of getting below 80.
Before the earnings were announced, CSX’s stock closed at $43.33, even for the day, although it was slightly up in after-hours trading.