July 17 (Bloomberg) -- CSX Corp., the biggest eastern U.S. railroad, reported second-quarter profit that beat analysts’ estimates as growth in container-car shipments eased the effects of sliding coal volumes.
Net income rose to $512 million, or 49 cents a share, from $506 million, or 46 cents, a year earlier, the Jacksonville, Florida-based company said today in a statement. That beat the average estimate of 47 cents from 26 analysts surveyed by Bloomberg.
The volume of intermodal cargos, which can be carried by rail, highway or sea, rose 8 percent, and sales increased 10 percent to $408 million. That helped make up for a 14 percent drop in coal revenue to $820 million.
Even with the decline in coal, CSX “put out upward of 32 percent operating margins,” Peter Nesvold, an analyst with Jefferies & Co. in New York, said in a telephone interview. “That’s pretty impressive.”
The rail carrier said its train crews are operating more efficiently which has made for better asset utilization as it works to improve its operating ratio, a gauge of expenses to revenue, to 65 percent in 2015.
“It’s relatively manageable to park coal cars and then redeploy the locomotive and crews into other parts of the network,” Nesvold said. “That seems to be what played out here.”
CSX benefited from a 5 percent decline in fuel costs to $410 million, and year-over-year growth in automotive shipments that widened to 27 percent.
Total revenue slipped to $3.01 billion from $3.02 billion a year earlier. That compares with analysts’ average estimate of $3.04 billion.
Shares climbed 1.5 percent to $23.14 at 4:38 p.m., after the close of regular trading in New York.
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