- Railroad is first among major carriers to post earnings
- Low natural gas prices undercut demand for utility coal
CSX Corp. reported earnings that topped analysts’ estimates as cost reductions and faster-running trains helped make up for a slump in coal carloads at the largest railroad in the eastern U.S.
Net income of 52 cents a share beat the 50-cent average of estimates compiled by Bloomberg. Sales declined 8.8 percent to $2.94 billion, CSX said Tuesday. The stock rose 1.2 percent to $28.04 at 4:12 p.m. New York time in late trading.
Railroads have sought to reduce costs, mostly by parking locomotives and furloughing workers, to make up for weak demand for commodity freight. A few bright spots, such as autos and containerized consumer goods, helped mitigate the declines. Industrywide motor-vehicle carloads rose 2.4 percent and intermodal shipments -- boxes that can go by train, truck or ship -- climbed 2 percent for major U.S. carriers in the quarter.
Cargo on the largest U.S. carriers slumped 1.6 percent in the quarter, according to Association of American Railroads data, as low natural gas prices led utilities to switch from coal and the rout in global oil prices from more than $100 a barrel last year sapped demand for crude-by-rail shipments.
CSX reiterated that it expects 2015 earnings-per-share growth in the “mid-single digits.” The forecast was lowered in September from “mid-to-high” single digits earlier this year.
The railroad was the first to report results for the third quarter.