CSX Profit Tops Estimates as Cost Cuts Soften Freight Dropby
Railroad’s shares rise most since January on quarterly results
Company releases earnings early after incorrect tweet sent
CSX Corp.’s second-quarter profit beat analysts’ estimates as cost cuts helped ease the blow of rail freight declines.
Adjusted earnings fell to 47 cents a share from 56 cents a year earlier, CSX said in a statement Wednesday. That topped the 44-cent average of 25 analyst estimates compiled by Bloomberg. Revenue declined 11.7 percent to $2.7 billion, the company said Wednesday. Analysts had expected revenue of $2.69 billion.
CSX and other large North American railroads have furloughed workers, sidelined locomotives and sought to boost efficiency to make up for the freight slump. Large U.S. railroads saw cargo traffic drop 8.3 percent in the second quarter, according to weekly data from the Association of American Railroads.
The railroad’s cargo volume fell 9.3 percent amid “a challenging market, which is expected to persist throughout this year,” said Chief Executive Officer Mike Ward in the statement.
CSX rose 4.6 percent to $28.25 at 3:41 p.m. in New York after the results were released about an hour ahead of the company’s planned statement following the market close. The shares climbed as much as 5.5 percent after the release, the biggest intraday increase since Jan. 14.
An inadvertent tweet containing second-quarter earnings information had moved about 2 p.m., CSX spokeswoman Melanie Cost said.
“It was removed immediately,” Cost said in an e-mail. "The moment we learned of it, we felt it was important to give investors the correct information as quickly as possible.”
CSX reduced its freight volume outlook in May as coal shipments continued to slump more than expected. The fossil fuel, which had made up more than 30 percent of CSX’s revenue before 2012 and dwindled to only 15 percent in the first quarter, is being replaced by cheaper and cleaner-burning natural gas at many power plants. CSX also grappled with severe flooding in West Virginia that disrupted the Jacksonville, Florida-based railroad’s network.