CSX Revenue Falls as Coal Shipments Continue to Slip -- Update
July 13 2016 - 8:27PM
Dow Jones News
By Ezequiel Minaya
CSX Corp. said Wednesday that revenue for its second quarter
fell 12% as falling coal shipments -- a key business for freight
lines -- continued to pressure the railroad operator.
Shares of CSX, though, rose 4.4% to $28.21 on Wednesday as the
company's earnings topped expectations. The stock is up 9% for the
year.
The Jacksonville, Fla., company released its earnings report
more than an hour earlier than expected to correct "information
released via Twitter earlier today."
A spokeswoman for CSX said in an email message that the posting,
which went up on the social media site at about 2 p.m. ET, was
removed "immediately." She didn't specify what the message said but
added that CSX officials moved ahead with an early release of their
earnings report to provide "investors the correct information as
quickly as possible."
CSX has struggled over the past two years as sagging demand for
coal, amid plunging energy prices and a strong U.S. dollar, has cut
into rail traffic.
For the latest quarter, coal volume for CSX was down 30%. The
company has said it expects the market to remain challenging, with
coal volumes down about 25% for the year.
"The environment that we see is really typified by low
natural-gas prices, low commodity prices and a strong U.S. dollar,
and we expect those to continue even though we had seen some small
moderation in those in the past few weeks," CSX Chief Financial
Officer Frank Lonegro said in May at an industry conference,
according to a FactSet transcript.
On Wednesday, CSX said it expects 2016 full-year earnings per
share to decline. The company, though, didn't provide a specific
forecast.
CSX has met or exceeded earnings expectations over the past
three quarters, having responded to sector turmoil with efficiency
moves that included layoffs and the mothballing of trains.
For the quarter ended June 24, CSX reported a profit of $445
million, or 47 cents a share, down from a year-ago profit of $553
million, or 56 cents a share.
Revenue fell 12% to $2.7 billion.
Analysts surveyed by Thomson Reuters expected earnings to
decline to 44 cents a share on revenue of $2.7 billion.
According to the Association of American Railroads, U.S.
carloads through the past six months fell 12.5% compared with the
same period last year, with coal carloads plunging 30.2%. Petroleum
and associated products also dragged on the traffic tally, falling
21.6%.
Hopes that intermodal traffic -- the hauling of shipping
containers -- would help offset the drop-off in other categories,
haven't quite been met. Total intermodal units fell a modest
2.7%.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
July 13, 2016 20:12 ET (00:12 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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