CSX Corp. told its annual Investor and Financial Analyst Conference in Detroit Wednesday that it’s “targeting a compound annual growth rate in earnings per share of 18% to 20% through 2015, supported by a compound annual growth rate for operating income of 12% to 14% over the same time period.” The company reaffirmed its goal of achieving a 65% operating ratio no later than 2015.
“CSX is ideally positioned to meet the growing transportation demand in this country,” said Michael J. Ward, chairman, president, and CEO. “Expansion in the U.S. economy, global trade, and CSX’s substantial investments in its infrastructure mean more things will move on our highly efficient freight rail network.”
Noting that it invested $8.3 billion in improvements in the five years between 2006 and 2010, CSX said it expects to reinvest an average of 18% of its revenue back into its business through 2015.
The company intends to base future dividends on a payout ratio of 30% to 35% of earnings per share as measured on a trailing 12-month basis. It’s also targeting share repurchases of about $1 billion annually after its current $2 billion program is completed in 2012.
“Our high expectations for CSX are grounded in what we clearly see happening in the marketplace and what we know about the capability of our people, our infrastructure, and our ability to bring value to customers,” said Oscar Munoz, executive vice president and chief financial officer. “We see significant opportunity to create value and are working to build on that opportunity through the balanced deployment of capital and a focus on strengthening our credit profile.”