(The following article by Christopher Calnan was published in the online edition of the Florida Times-Union)
NEW YORK — CSX Corp., the parent company of Jacksonville’s CSX Transportation, reported strong fourth-quarter earnings for 2002 yesterday that improved on the previous year’s earnings for the same period.
The report marked eight of the last nine quarters with improved earnings over the year before. The third quarter of 2002, which had a steep decline in coal business, was the exception.
“We had an aberrant third quarter, but we’re back on track,” CSX President Michael Ward said at the company’s earnings meeting. “It proves to us that if we put forth better service out there we get better productivity.”
CSX reported $137 million, 64 cents per share, in net income, compared with $65 million, or 31 cents per share, for the same period the previous year.
CSX paid off the $60 million settlement, in fourth-quarter 2001, of a lawsuit prompted by a 1987 chemical fire in New Orleans.
A strong performance by the company’s main rail and intermodal business was responsible for much of the increase. Gains in revenue from general merchandise and automotive shipments and intermodal transportation more than made up for an 8 percent decline in coal revenue. Lower expenses for materials and supplies and in the Conrail division also helped boost profit.
The CSXTrailroad is CSX’s core business, and coal handling generates about 25 percent of CSX’s revenue. While coal shipping business was down, the sale of its Charlotte, N.C.,-based CSX Lines LLC. for $300 million in cash and securities offset the decline in coal, CSX said.
For the full year, CSX said it earned $424 million, or $1.09 a share versus $293 million, or $1.38 a share, in 2001. Revenue edged up to $8.15 billion from $8.11 billion in 2001.
Richmond-based CSX operates a railroad system that serves 23 states and has interests in marine freight shipping, real estate and natural gas distribution.
CSXT sales and marketing executive vice president, Mike Giftos, said officials are cautiously optimistic for the remainder of this year because cold weather should reduce inventories. He expects coal revenue to return to earlier levels by the end of this year.
“Coal, as we move through the year, should move into the favorable category,” he said.
Ward is the likely choice to become chief executive officer if CSX CEO John Snow is confirmed by the U.S. Senate as the new Treasury secretary. Although the the Senate Finance Committee approved Snow’s appointment yesterday, the full Senate hasn’t voted on Snow’s appointment and isn’t likely to until next week.
Ward said Snow’s nomination by President Bush brought plenty of scrutiny to CSX. However, no investigations revealed substantial problems.
“I think that’s quite a commendation on [Snow] and our company,” Ward said.