(The Associated Press circulated the following on April 14, 2009.)
NEW YORK — Analysts expect deteriorating demand will took a chunk out of earnings at railroad CSX Corp., which reports first-quarter profit after the market closes.
Edward Wolfe of Wolfe Research said in a recent note to clients that he believes the eastern railroads – CSX and rival Norfolk Southern Corp. – will feel the brunt of a slowing economy on their businesses.
He also suggests that current Thomson Reuters earnings estimates are still way too optimistic. Wolfe said that stocks, including CSX have been driven higher on hopes that the economy has reached a bottom, although there are currently few signs signaling the worst is over. In fact, Wolfe said his early data suggests that March demand was even worse than the month before.
Analysts polled by Thomson currently expect a profit of 51 cents per share on revenue of $2.26 billion.
The Jacksonville, Fla.-based railroad operator will also take a charge in the first quarter to account for the historic but money-losing resort it owns, The Greenbrier. The resort filed for Chapter 11 bankruptcy protection last month and announced plans to sell itself to Marriott International Inc.
These one-time charges, while included in net income figures, are generally excluded by analysts in their calculations.