(Reuters circulated the following on July 15.)
CHICAGO — CSX Corp., the U.S. railroad, reported higher second-quarter net profit that met expectation on Tuesday as strong pricing offset a 3 percent decline in freight volumes.
The Jacksonville, Florida-based railroad reported net income rose to $385 million, or 93 cents a share, from $324 million, or 71 cents a share, a year earlier.
Excluding income tax benefits of 4 cents per share, the company posted EPS of 89 cents, matching analysts’ average target, according to Reuters Estimates.
“The strong earnings performance delivered by this team was supported by all-time records in revenue and operating income, despite the effects of a softer economy,” Chief Executive Michael Ward said in a statement.
CSX said it had seen sustained strong demand for U.S. export coal, grain, ethanol, metals and phosphates during the quarter. U.S. coal exports have been boosted this year by demand for coal from Europe, in particular for Appalachian coal.
But while freight volumes in CSX’s coal and agricultural divisions rose 2 percent and 5 percent, respectively, most freight types saw declines in the quarter.
Automotive shipments fell 23 percent, reflecting a weak year for the U.S. auto industry, while intermodal shipments were down 2 percent. Intermodal shipments rely on standardized containers that haul mostly consumer goods or finished products.
While intermodal shipments were down, revenue in the segment rose 12 percent due to price increases.
Total revenue jumped 15 percent to $2.91 billion from $1.78 billion. Analysts expected $2.83 billion.
Like the other major U.S. railroads, CSX has posted strong profits in recent quarters despite a slowing U.S. economy and higher fuel prices, due largely to strong pricing.
For the full year, CSX expects EPS at the upper end of a range from $3.40 to $3.60 a share. Analysts look for full-year EPS of $3.57.
CSX has been engaged in a lengthy proxy battle with two hedge fund shareholders: The Children’s Investment Fund (TCI) and 3G Capital Partners. TCI and 3G have long argued that the company is underperforming and proposed a five-member dissident slate to CSX’s 12-member board.
The railroad’s management fought against the dissident slate, arguing that the hedge funds would saddle the company with debt and cut back on vital infrastructure investments.
Shareholders voted on the board members at CSX’s shareholder meeting in New Orleans last month. CSX said the vote was too close to call and would release the final results July 25 after a full count.
TCI and 3G have claimed four of their five nominees had made it onto the board in the vote.