Cuts Help CSX Damp Declines -- WSJ
October 13 2016 - 3:03AM
Dow Jones News
By Ezequiel Minaya
CSX Corp. said Wednesday that revenue for its third quarter fell
8%, as plunging coal shipments -- a key business for freight lines
-- kept pressure on the railroad operator.
The company's belt tightening, however, once again helped it top
Wall Street expectations.
The freight line has previously said it expects coal volumes to
fall 25% this year. The railway sector has been battered by
plunging fuel prices that have made natural gas a cheap alternative
to coal. Fuel-surcharge revenues have also dropped.
For the latest quarter, coal shipments slipped 21%. CSX's metals
and equipment business was also a leading decliner, falling
13%.
CSX said export coal declined due to oversupply in the world
market and a strong U.S. dollar that generally makes U.S. exports
more expenses overseas. Domestic coal, CSX added, while still
sliding has offered a relative bright spot. The railroad said
declines appeared to ease because hot summer weather stoked
demand.
Intermodal traffic -- the moving of shipping containers --
declined 7%.
CSX, however, has met what it has deemed "recession-like"
pressures by furloughing workers and mothballing railcars as
productivity measures have helped the company meet or defy Wall
Street expectations.
For the latest quarter, the company cut total expenses 6.8% to
$1.87 billion.
For the quarter ended Sept 23, CSX reported a profit of $455
million, or 48 cents a share, down from a year-ago profit of $507
million, or 52 cents a share.
Revenue fell to $2.71 billion from $2.94 billion a year ago.
Analysts surveyed by Thomson Reuters expected earnings to
decline to 45 cents a share on revenue of $2.69 billion.
Shares of the company, up 6.3% over the past year, climbed 2.4%
after hours to $30.98
According to the Association of American Railroads, carloads in
September were down 5.4% from the same month last year. Coal
shipments were down 13.1% while petroleum products declined
21.6%.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
October 13, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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