(Bloomberg News circulated the following story by Craig Trudell on July 13, 2009.)
NEW YORK — CSX Corp., the third-largest U.S. railroad, posted quarterly profit that beat analysts’ estimates after cutting spending on fuel, supplies and labor.
Profit for the second quarter was 72 cents a share excluding the Greenbrier resort, which is being sold, the Jacksonville, Florida-based carrier said today in a regulatory filing. Analysts expected earnings on that basis of 62 cents, the average of 15 estimates compiled by Bloomberg.
CSX led off quarterly earnings reports for the four largest domestic railroads. The collective profit for the group may be $1.24 billion, based on analyst estimates compiled by Bloomberg. That would be 28 percent less than their total of $1.72 billion a year earlier.
“While the economy continues to significantly impact our business, there are some signs that we may be seeing the bottom in many markets,” CSX Chief Executive Officer Michael Ward said in a statement.
CSX shares rose $1.03, or 3.2 percent, to $33.57 at 5:24 p.m. after the close of regular New York Stock Exchange trading. Earlier, they gained 51 cents, or 1.6 percent, to $32.54 in NYSE composite trading.
Net income was $308 million, or 78 cents a share, CSX said. That compared with $385 million, or 93 cents, a year earlier.
The railroad has been shrinking payroll as the weak economy crimped demand, and falling diesel prices trimmed its fuel costs by 66 percent. That helped CSX offset declines of 25 percent to $2.2 billion in revenue and 21 percent in freight volume.
Industry Forecast
Burlington Northern Santa Fe Corp., the biggest domestic carrier by sales, releases its results next week, along with No. 2 Union Pacific Corp.Norfolk Southern Corp., the fourth- largest railroad, is scheduled to report earnings on July 28.
Weak demand for coal, the biggest product category by volume for U.S. railroads, was expected to drive profits down by more than a third at the major domestic carriers.
Rail-freight volumes fell 19 percent this year through July 4, according to the Association of American Railroads, the industry’s Washington-based trade group. The decline reflects fewer shipments of autos and lumber in the recession and an 8.3 percent drop in coal deliveries. Natural gas futures in New York have plunged 73 percent in the past year.