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CSX’s Ward Says Autos Leading ‘Gradual’ U.S. Recovery

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Michael Ward, chairman, president and CEO of CSX Corp.
Michael Ward, chairman, president and chief executive officer of CSX Corp. Photographer: Jonathan Alcorn/Bloomberg

Oct. 13 (Bloomberg) -- CSX Corp. Chief Executive Officer Michael Ward said increased U.S. automobile production is helping drive a gradual economic recovery.

The second-largest publicly traded U.S. railroad yesterday reported third-quarter profit that topped analysts’ estimates as a 44 percent increase in automotive shipments boosted rail volumes. North American car and light-truck production rose 62 percent through August this year to 7.86 million vehicles, according to Ward’s AutoInfoBank.

“Except for housing-related, we’re seeing things continue their gradual recovery,” Ward, 60, said today in a telephone interview. “You are getting the drag effect you would expect as automotive continues to rebound.”

Profit from continuing operations climbed to $414 million, or $1.08, from $290 million, or 73 cents, a year earlier, Jacksonville, Florida-based CSX said yesterday in a statement. The average estimate of 24 analysts surveyed by Bloomberg was profit of $1.04 a share.

Total shipping volumes rose 10 percent, CSX said. Sales climbed 16 percent to $2.67 billion, helped by higher prices and revenue gains in autos, chemicals and fertilizers.

“There is some pricing ability because we are an attractive option for people,” Ward said. “If they look at their options of moving stuff by truck or other modes, rail is the most attractive to them. So even with the slightly higher prices, we still are a good value.”

CSX rose $2.40, or 4.2 percent, to $59.66 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 23 percent this year.

Union Pacific Corp. is the largest publicly traded U.S. railroad. CSX trails both Union Pacific and Warren Buffett’s Burlington Northern Santa Fe Corp. by 2009 revenue.

To contact the reporter on this story: Mark Clothier in Southfield, Michigan, at mclothier@bloomberg.net.

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net.

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