(The following story by John D. Boyd appeared on The Journal of Commerce website on July 13, 2010.)
WASHINGTON, D.C. — Major eastern-U.S. railroad CSX posted a $414 million profit in the second quarter. That was up 36 percent from the 2009 period, while its $2.663 billion in revenue was up 22 percent.
The first of the major North American railroads to report its earnings, CSX’s profit margin was more than 15.5 percent of sales.
It turned in those numbers partly by holding expenses to an 18 percent rise from a year earlier, or less than the increase in receipts. Freight volume rose 13 percent and continued pricing gains helped push up the revenue per unit hauled at CSX Transportation by 8 percent.
Most of its pricing gains came from bulk railcar loadings, including an 18 percent per-unit increase on coal as CSX continues to benefit from export coal demand.
But in a measure of how competitive the intermodal market remains, CSX’s revenue increase for container and trailer loadings trailed its volume gain to produce a 9 percent drop in average revenue per box. CSX took in average receipts of $565 per intermodal haul in the latest quarter, down from $624 a year earlier.
CSX said it increased the workforce by 1 percent and paid higher incentive compensation, but a 10 percent increase in labor and fringe benefit costs trailed over large expense items. Fuel costs jumped by 64 percent, while costs of materials and supplies rose 24 percent.
The carrier ended the quarter with 4,067 locomotives, down 1 percent from the end of the 2009 period. Its 80,471 railcars owned or on long-term lease were down 7 percent.
CSX trains also ran slower on average in the 2010 second quarter, as velocity of 20.9 mph fell 4 percent. It also saw a 12 percent drop in on-time train arrivals as traffic increased from the 2009 quarter, and an 8 percent fall in on-time departures.