(The Associated Press circulated the following story by Ron Word on January 22.)
JACKSONVILLE — Railroad operator CSX Corp. says it’s expecting a double-digit increase in earnings this year after reporting its fourth-quarter profit rose 46 percent, due in part to pricing power and strength in shipments of coal and agricultural freight.
“In 2007, we expect demand to be strong and our operations to be stronger,” Chairman and CEO Michael Ward said. “We remain confident in our previous guidance of double-digit growth in operating income, earnings and free cash flow.”
The Jacksonville-based company said Monday that its strength in coal and agriculture-related freight offset weakness in housing and automotive shipments. The company also reported an 8 percent yield improvement.
“These results helped to drive significant value for our shareholders with the company’s stock price increasing 36 percent for 2006. In addition, we delivered further value by increasing dividends 54 percent and by repurchasing $465 million of our stock,” Ward said.
Shares of CSX, which reported results after the markets closed, dropped 68 cents, or 1.9 percent, to $34.42 in after-hours trading. The shares had closed Monday down 63 cents at $35.10 on the New York Stock Exchange.
The company’s fourth-quarter earnings improved to $347 million, or 75 cents per share, from $237 million, or 52 cents per share during the same period a year earlier. For the fiscal year, CSX reported net earnings of $1.31 billion, compared with $1.14 billion for fiscal year 2005.
The quarterly increase included a gain of 18 cents per share related to insurance recoveries related to Hurricane Katrina in 2005, as well as gains related to a Conrail property and the resolution of some tax matters. The company said additional gains are expected in insurance recoveries in the future as more cash is collected. Excluding the gains, CSX said it earned 57 cents per share in the period.
Revenue grew 8 percent to $2.4 billion, from $2.22 billion during the same period a year ago.
Analysts polled by Thomson Financial forecast a profit of 57 cents per share on revenue of $2.45 billion.
CSX, with market capitalization of $15.23 billion, is the nation’s fifth biggest railroad. It provides rail, intermodal and rail-to-truck transload services. Its rail network spans about 21,000 miles, with service to 23 eastern states and the District of Columbia, and connects to more than 70 ocean, river and lake ports.