(The Associated Press circulated the following on September 7.)
NEW YORK — Shares of CSX Corp. fell more than 4 percent Friday as the broader market slipped and analysts expressed concern about the railroad operator’s near-term outlook.
Stifel Nicholaus analyst John G. Larkin lowered his full-year estimates on the company to $2.46 per share from $2.57 per share, saying he expects the stock price to fall as volumes continue to be lower than expected in the third quarter. The reduced expectations follow a sharp decline in the stock price, which analysts attributed to the overall slowing economy and widespread credit market concerns.
However, Larkin still remains optimistic about the company’s performance down the road, saying he left a recent meeting with management “with the sense that the future remains bright for the company longer-term despite the volume headwinds it is likely to encounter over the coming six to 12 months.”
Bear Stearns analyst Edward Wolfe lowered his 2007 expectations to $2.45 from $2.47, saying that at current prices the stock is expensive and will likely fall near-term.
But he echoed the expectations of other analysts when considering the company’s prospects several years from now.
“Despite continued weak volumes, CSX remains excited about long term growth opportunities from global trade and growing consumption in the Southeast,” Wolfe said. “Increased highway congestion should also support volume growth and pricing momentum over the longer term. CSX also continues to show solid improvements in safety and service metrics.”
Shares fell $1.68, or 4 percent, to $40.05 in midday trading, after trading as low as $39.71 earlier in the day. The stock has ranged between $29.62 and $51.88 in the past year.