CSX 2Q profit down 20 percent as rail volume slows 9 percent

By Josh Funk, AP Business Writer

CSX Corp. reported a nearly 20 percent drop in second-quarter profit as freight volume slowed 9 percent, but the railroad beat expectations by cutting expenses and raising rates where it could.

In this March 22, 2014, file photo, a CSX freight train rolls past a grade crossing in Mount Airy, Md. CSX reports financial results Wednesday, July 13, 2016. (AP Photo/Patrick Semansky, File)

OMAHA, Neb. (AP) — CSX Corp. reported a nearly 20 percent drop in second-quarter profit as freight volume slowed 9 percent, but the railroad beat expectations by cutting expenses and raising rates where it could.

The Jacksonville, Florida-based railroad said Wednesday it earned $445 million, or 47 cents per share, in the quarter. That's down from $553 million, or 56 cents per share, a year ago.

Analysts surveyed by FactSet expected CSX to earn 44 cents per share on $2.68 billion in revenue.

Revenue declined 12 percent from last year's $3.06 billion to $2.7 billion because of the volume decline. Coal shipments fell 34 percent, extending its prolonged decline.

Coal demand has plummeted over the past several years as the utilities that could switched fuels to natural gas take advantage of low gas prices or shut down coal plants ahead of new pollution regulations. Utility demand has largely stabilized, but now the export coal market is also weak.

Edward Jones analyst Logan Purk said CSX is doing a good job of responding to weak freight demand, falling coal shipments and reduced fuel surcharge revenue.

"They're managing well through what has been an extremely challenging environment," Purk said.

CSX reiterated that the railroad expects its earnings and total volume to decline in 2016.

The railroad cut its expenses 9 percent in the quarter in response to the slower shipping volume.

"In this environment, the company continues to right-size resources while making strategic investments to transform the company and capitalize on market opportunities to drive long-term value creation," said Michael Ward, CSX's chairman and CEO.

CSX operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Making DDoS Mitigation Part of Your Incident Response Plan: Critical Steps and Best Practices

Like a new virulent strain of flu, the impact of a distributed denial of service (DDoS) attack is...

The Multi-Tax Challenge of Managing Excise Tax and Sales Tax

To be able to accurately calculate multiple tax types, companies must be prepared to continually ...

Operational Analytics in the Power Industry

Cloud computing, smart grids, and other technologies are changing transmission and distribution. ...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Latest Energy Jobs

View more Job Listings >>

Archived Articles

PennEnergy Articles
2008 | 2009 | 2010 | 2011 | 2012 | 2013

OGJ Articles
2011 | 2012 | 2013

OGFJ Articles
2011 | 2012 | 2013

Power Engineering Articles
2011 | 2012 | 2013

Power Engineering Intl Articles
2011 | 2012 | 2013

Utility Products Articles
2011 | 2012 | 2013

HydroWorld Articles
2011 | 2012 | 2013

COSPP Articles
2011 | 2012 | 2013

ELP Articles
2011 | 2012 | 2013