CSX Profit Down, But Tops View

(RTTNews) - Railroad operator CSX Corp. (CSX), Tuesday reported a slight drop in profit for the third quarter, as revenues dropped 9 percent hurt largely by lower coal freight revenues. Nevertheless, earnings for the quarter trumped Wall Street estimates, while revenues fell short.

Jacksonville, Florida-based CSX's third-quarter profit dropped to $507 million from $509 million last year. On a per share basis, earnings improved to $0.52 per share from $0.51 last year, on lower number of shares. Analysts polled by Thomson Reuters estimated earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter dropped 9 percent to $2.94 billion from $3.22 billion last year. Analysts had a consensus revenue estimate of $2.98 billion for the quarter.

Total volumes dropped 3 percent to 1.71 million units, while revenue per unit dropped 6 percent to $1,717 from $1,832 last year.

Coal revenues fell 19 percent to $583 million from $721 million a year earlier, as volumes dropped 18 percent. Total merchandise revenues, which includes agricultural, industrial products and construction products, dropped 6 percent to $1.82 billion, while intermodal revenues inched down 1 percent to $451 million.

Total expenses declined 11 percent to $2.01 billion on the collective effect of continued low fuel prices, cost reductions reflecting lower volume and savings from efficiency initiatives.

"CSX's third quarter results demonstrate the company's ability to leverage improving service while controlling costs in a dynamic environment where commodity prices and the strength of the U.S. dollar are challenging many of our markets," said Michael J. Ward, chairman and chief executive officer

Moving ahead, CSX said it is still targeting to achieve mid-to-high single digit earnings growth for 2015.

CSX closed Tuesday's trading at $27.71, down $0.66 or 2.33%, on the NYSE. The stock, however, gained $0.29 or 1.05% in the after-hours trade.