(The Associated Press circulated the following article by John Pain on July 27.)
MIAMI — Rail and transportation conglomerate CSX Corp. said Wednesday that second-quarter earnings rose more than 38 percent on higher surface shipping revenues, especially of coal.
The Jacksonville-based company reported earnings of $165 million, or 73 cents a share, up from $119 million, or 53 cents a share, a year ago. Excluding one-time expenses and benefits, earnings were 96 cents a share, above the average estimate of 81 cents a share expected by analysts surveyed by Thomson Financial.
The owner of the largest railroad in the eastern United States said revenues at its core surface transportation business were $2.17 billion, up about 8 percent from $2 billion a year earlier. The strength was led by the coal and merchandise shipping markets.
Merchandise revenues were $1.06 billion, up 7 percent from $991 million, and coal, coke and iron ore revenues were $541 million, up 22 percent from $442 million. Intermodal revenues were $330 million, up 2 percent from $325 million.
“Near term, we expect the economy will continue to grow although at a slower rate than the nation has seen in the past several quarters. Meanwhile, the pricing of our market remains strong and our team will continue to drive yield improvement,” said Michael J. Ward, chairman, president and chief executive.
The company expects full-year earnings to come in at $3.15 to $3.25 a share. Analysts surveyed by Thomson Financial expect $3.07, on average.
“With U.S. consumption increasing and more and more demand being met by imports, these must be carried long distances across the country. Our rail network is well positioned to make these deliveries into some of the most heavily populated areas of the country,” Ward told analysts in a conference call.
The company also repurchased $1 billion of its debt in the quarter to strengthen its balance sheet and reduce interest expenses. This caused an after-tax expense of $123 million, or 54 cents a share, which was partially offset by an income tax benefit of $71 million, or 31 cents a share, because of a change in Ohio corporate tax laws.
For the first half, earnings were $744 million, or $3.29 a share, compared to $149 million, or 67 cents a share. The first quarter was boosted by the sale of its international terminals business.
CSX shares rose 10 cents, or 0.2 percent, to $45.55 in late afternoon trading Wednesday on the New York Stock Exchange. The stock has traded in a 52-week range of $30.10 to $45.90.