(Reuters circulated the following article on April 30.)
MIAMI — CSX Corp., the biggest rail operator in the eastern United States, on Wednesday said quarterly earnings declined as fuel costs rose and harsh winter weather weighed on shipments.
The Jacksonville, Florida, freight hauler said first-quarter profit was $42 million, or 20 cents a share, before a gain from an accounting change . A year earlier, CSX had profit of $68 million, or 32 cents a share, helped by cost-cutting and a real estate sale.
Wall Street had on average forecast 17 cents a share, according to 12 analysts surveyed by Thomson First Call.
“Fuel expenses were up $54 million year-over-year and the severe winter weather affected the fluidity of the network negatively and caused significant labor and equipment expense increases,” CSX Chief Executive Michael Ward said.
Revenue totaled $2.02 billion in the quarter, up from $1.96 billion a year earlier, according to a news release.
Overall operating income declined to $177 million from $212 million in the year-ago quarter. Echoing comments from other North American transport groups, CSX said operating income at its core rail and intermodal units declined to $169 million from $194 million in early 2002 as foul weather mucked up operations and hurt by higher fuel costs.
First-quarter consolidated operating income also included executive retirement expenses of $16 million.
During the quarter, CSX paid former CEO John Snow $60.8 million after he stepped down on Feb. 3 to become U.S treasury secretary. According to a proxy statement filed last month, Snow was paid $8.7 million in cash compensation deferred over 17 years, $18.9 million in stock he accrued over a decade, and a lump sum pension payment of $33.2 million.
Shares of CSX closed down 7 cents on Tuesday in trading on the New York Stock Exchange. The shares rose about 16 percent during the six months through Tuesday, while the Dow Jones U.S. Railroads Index .DJUSRR has dropped just over 2 percent.