(Reuters circulated the following story by Nick Carey on January 22.)
CHICAGO — U.S. railroad CSX Corp. reported a higher quarterly net profit on Monday that met Wall Street expectations, but sent shares down 3 percent in after hours trading.
The company also reaffirmed its previous outlook of double-digit growth in operating income, earnings and free cash flow for 2007.
“This was a solid but mixed quarter for CSX,” said Andrew Meister an equity research analyst at Thrivent Asset Management, which manages assets of $67 billion and holds close to 300,000 shares in CSX.
“Ten to 15 percent earnings growth isn’t bad in an economy where a lot of people are suffering a lot of heartache,” he added.
Jacksonville, Florida-based CSX reported fourth-quarter net profit, including insurance recoveries related to Hurricane Katrina, of $347 million or 75 cents a share, compared with $237 million or 52 cents a share a year earlier.
Excluding items, CSX earned 57 cents a share for the quarter.
Wall Street analysts, on average, had expected earnings per share for the quarter of 57 cents, according to Reuters Estimates.
The company also reported fourth-quarter revenue of $2.4 billion, which was also in line with analyst expectations, according to Reuters Estimates.
Although forestry products saw a 10 percent decline in volume, revenue for the segment was up 3 percent. Agricultural product volumes rose 14 percent, while revenue rose 25 percent. Coal volume rose 4 percent, with revenue up 15 percent.
Automotive volumes were down 10 percent on the year, with revenue down 7 percent.
In a statement CSX Chief Executive Officer Michael Ward said, “We remain confident in our previous guidance of double-digit growth in operating income, earnings and free cash flow” in 2007.
The railroad reported full-year 2006 earnings per share of $2.22 excluding items.
Analysts had predicted full-year 2007 earnings per share for CSX of $2.55, a projected rise of nearly 15 percent over the earnings reported on Monday, according to Reuters Estimates.
“These results and outlook indicate that CSX is still able to deliver some decent numbers even if economic growth is slowing,” Thrivent’s Meister said. “These results could have a positive impact on the share price.”
In post-market online trading, CSX shares were down 63 cents at $35.10, but up from an after-hours low of $34.90.