(Updates with additional sector information.)
DOW JONES NEWSWIRES
CSX Corp.'s (CSX) first-quarter earnings declined 30% as coal
volumes dropped and weakness in industrial production, housing and
consumer spending lowered volumes.
The freight sector has been under pressure as the economic
downturn has hurt demand for nearly all goods, pushing traffic down
in nearly every industry linked to freight movement. In response,
CSX, the nation's third-largest railroad by revenue, has furloughed
employees and idled locomotives.
The weakness in coal volumes came adds to CSX's broader volume
woes, as the company had recently counted on coal and grain
shipments to keep results strong.
CSX, which operates in 23 Eastern states and the District of
Columbia, reported earnings of $246 million, or 62 cents a share,
down from $351 million, or 85 cents a share, a year earlier. The
prior year's results included a 5-cent gain from an equity earnings
adjustment.
Revenue dropped 17% to $2.2 billion amid a 17% decline in
volume. In January, the company foresaw a double-digit drop in
first-quarter shipping volume, which was also hurt by a drop in
volumes in the agriculture and energy sectors.
The revenue drop matched the company's 17% drop in operating
expenses, allowing the company to produce operating income of $522
million in the quarter.
Analysts polled by Thomson Reuters expected per-share earnings
of 51 cents on revenue of $2.26 billion.
Automobile volume and revenue fell 53%, while agriculture volume
was flat. Coal volume, which had buoyed the industry in recent
quarters, was down 7%. Intermodal volume was down 13%, and revenue
was off 22%, as imports and exports slowed.
The railroad operator indicated earlier this year that it could
continue to raise prices because shipping freight by rail remains
more cost-effective for companies. Some railroad customers have
called on Congress to reinstate tighter industry oversight in
response to the industry's pricing hikes.
Standard & Poor's Ratings Service in February said it
believed rail companies, including CSX, will perform better than
other transportation companies, as they benefit from the diversity
of its customers and end markets.
Shares were up 5.8% to $30.04 in after-hours trading. The
company's stock has lost over half its value since September.
-By John Kell, Dow Jones Newswires, 201-938-5285,
john.kell@dowjones.com
(Doug Cameron contributed to this report.)