(The Times-Union published the story by Christopher Calnan on its website on July 25.)
JAKCSONVILLE, Fla. — CSX Corp. reported a drop in earnings yesterday for the second-straight quarter, and its top executive pledged system-wide improvements to the railroad, especially to its problem-plagued Atlanta-area operations.
The Jacksonville-based railroad reported quarterly earnings of $127 million, or 59 cents per share, compared to $135 million, or 63 cents per share, a year ago. Revenue was $1.94 billion vs. $2.07 billion a year ago.
“It’s painful to admit, but we didn’t run the railroad real well in the second quarter,” Chairman and Chief Executive Officer Michael Ward said. “We’re not real pleased with these results, and we’re taking steps to resolve some issues. Failure to resolve these issues is not an option.”
The company’s surface transportation division, which includes the railroad and the intermodal unit, reported revenue of $1.89 billion, up from $1.83 billion for the same period last year. But operating income slumped to $259 million compared to $293 million in 2002.
CSX’s executive vice president and chief financial officer, Oscar Munoz, said the company has eliminated 451 jobs so far this year, and it’s accelerating the job-cutting pace to reach 900 total before the end of the year deadline.
The railroad has said the jobs are being eliminated through layoffs and attrition.
Ward blamed CSX’s decreased earnings on the combination of bad weather conditions, slow operations in the railroad’s Atlanta division and tactical decisions made by employees intending to help customers, but inadvertently hurting the flow of the overall system.
“Reduced network fluidity caused a significant increase in labor expenses, partially offsetting the strong revenue gains,” he said. “Looking ahead, we will regain our operational discipline and push more of our revenue to the bottom line.”
The railroad’s western region vice president, Mike Peterson, was moved this month to CSX’s southern region — the largest of CSX’s five regions — to resolve the problems, Ward said.