RICHMOND, Va. — CSX Corp.’s profit surged 25% in the first quarter, as the railroad coped with economic weakness by cutting costs and increasing margins, the Wall Street Journal reported.
The company, which operates a rail network in the eastern part of the U.S., on Monday said net income rose to $25 million, or 12 cents a share, in the quarter ended March 29 .
It earned $20 million, or a dime a share, a year earlier.
The latest results included a charge of $43 million, or 20 cents a share, to reflect a required change in the way the company accounts for goodwill. Excluding the charge, CSX said it earned 32 cents a share, slightly more than analysts anticipated.
Revenue fell 3% to $1.96 billion from $2.03 billion in the first quarter of 2001. The company blamed the decline on a drop in merchandise shipments, and said a mild winter hurt demand for coal shipments.
But CSX said it was able to boost profit by keeping costs down.
Operating expense declined 4.6% to $1.75 billion. Price increases in some markets and lower fuel expenses also helped.
“All of our businesses performed well in a struggling economy, Chairman and Chief Executive John Snow said in a written statement. “Our railroad and intermodal operations, which are the core of CSX today, continue to produce higher year-over-year earnings, reflecting stringent focus on costs and efficiencies.”
Operating earnings at the company’s rail and intermodal businesses, which include truck cargo, rose 6.6% to $194 million, even as revenue declined 3%. Combined earnings from CSX’s marine business were up 33%.
Separately, Canadian National Railway Co. (CNI) said its net income fell 16% from a year earlier, when the company had a big gain on the sale of an asset. Excluding that gain, the Montreal company’s earnings rose 14%, to 230 million Canadian dollars (US$146.3 million), helped by the acquisition in October of Wisconsin Central Transportation Corp.
Canadian National reported solid revenue gains from its automotive, forest- products and petroleum and chemicals divisions. “Our automotive unit benefited from strong North American vehicle sales, while CN’s forest-products group transported greater volumes of lumber and panels in response to increased demand for new housing in the U.S. and Canada ,” said Paul M. Tellier, president and chief executive officer. Those improvements offset declining revenue for bulk commodities such as grain, fertilizers and coal.
Overall, Canadian National’s revenue rose 7.9%, to C$1.51 billion from C$1.4 billion. Net income was C$1.15 a share, compared with the year-earlier C$275 million, or C$1.39 a share. The year-earlier period included a C$72 milllion net gain from the company’s sale of its stake in Detroit River Tunnel Co . In 4 p.m New York Stock Exchange (news – web sites) composite trading, CSX shares were down $ 1.70, or 4.6%, at $35.01, while Canadian National was up 70 cents, or 1.4%, at $ 51.36. Canadian National reported its results after 4 p.m.