CSX profit up 1% in 3Q

CSX Corp. on Oct. 17 reported third-quarter 2017 net earnings of $459 million, or 51 cents per share, up from $455 million, or 48 cents per share, in the same period last year. Excluding a $1 million restructuring charge, adjusted earnings per share remain at 51 cents.

The Jacksonville, Fla.-based railroad, which has faced criticism from shippers and scrutiny from regulators over service issues, said revenue for the quarter ending Sept. 30 increased 1% from the third quarter 2016, on core pricing gains and offset by the impact of unfavorable mix of freight. Expenses declined $2 million with efficiency gains of $95 million more than offsetting the cost of inflation and fuel costs that were 19% higher.

Total volume was stable, while operating income improved 4% to $876 million and the operating ratio improved 90 basis points to 68.1. The company added it has completed the $1.5 billion share repurchase program that was announced in April 2017 and upsized in July 2017.

The results came after CSX President and Chief Executive E. Hunter Harrison in an interview with Railway Age said the railroad was beginning to see improvement following the implementation of his Precision Scheduled Railroading. 

“The company’s results for the third quarter reflect the resiliency of Precision Scheduled Railroading, even during times of transition,” said Harrison. “With that transition largely behind us, we are now intensely focused on driving superior service for our customers and lasting value for our shareholders.”

Adjusting for restructuring charges, CSX expects to deliver a full-year operating ratio around the high end of the mid-60s, earnings per share growth of 20-25% from a base $1.81 in 2016, and free cash flow before dividends of around $1.5 billion.

Looking ahead to the fourth quarter, the company said demand for U.S. export coal remains strong while consumer demand through the holidays will boost intermodal traffic. A less favorable outlook was seen for automotive, crude oil and domestic coal.