April 16, 2019 / 8:43 PM / 5 days ago

UPDATE 2-CSX quarterly profit beats view, stock jumps

(Adds executive comment, updates stock price)

By Lisa Baertlein

LOS ANGELES, April 16 (Reuters) - CSX Corp on Tuesday reported quarterly profit that topped Wall Street's expectations, after the No. 3 U.S. railroad operator pushed through price increases and contained labor and fuel costs by running fewer, but longer, trains.

Shares jumped 3.8 percent to $78.74 in after-hours trading after efficiency efforts at CSX, which serves the eastern third of the United States and the Canadian provinces of Ontario and Quebec, continued to yield results.

CSX's first-quarter net profit was $834 million, or $1.02 per share, up from $695 million, or 78 cents per share, a year earlier.

Analysts had expected a profit of 91 cents per share, according to Refinitiv IBES data.

Revenue rose 5 percent to $3.01 billion, driven by merchandise volume growth and broad-based pricing gains, while expenses declined 2 percent from the year earlier to $1.79 billion - yielding income growth of 17 percent for the quarter.

CSX's operating ratio, a measure of operating expenses as a percentage of revenue and a closely watched gauge of railroad performance, was 59.5 percent versus 63.7 percent in the year-ago quarter. Railroads boost profit by lowering their operating ratio.

The company started 2019 with an operating ratio below its target of 60 percent, and executives are monitoring business conditions amid signs the global economy is cooling.

"Generally, end-market demand remains stable," Chief Executive Jim Foote said on a conference call with analysts.

Jacksonville, Florida-based CSX was the first large U.S. railroad to embrace "precision railroading" under the guidance of Hunter Harrison, an investor favorite for leading turnarounds of Canada's two major railroads.

Harrison died in December 2017, just eight months into a restructuring campaign that included cutting jobs, shuttering multiple rail yards, mothballing locomotives and rail cars and running longer trains on strict schedules, rather than based on customer needs.

Foote, who worked for Harrison when he led a turnaround at Canadian National Railway Co, continued Harrison's plan. (Reporting by Lisa Baertlein in Los Angeles; Editing by Susan Thomas and Peter Cooney)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below