CSX projects weaker Q3 as domestic coal volumes decline

The Jacksonville, Fla.-based Class I railway said it expects third quarter earnings per share to decline slightly from last quarter due to high single-digit volume reductions from the same period a year ago.

   Jacksonville, Fla.-based Class I railway CSX announced Wednesday that it expects third quarter earnings per share to decline slightly from last quarter due to high single-digit volume reductions from the same period a year ago.
   A big part of the volume drop is from coal, with total tonnage for 2016 now expected to decline between 20 percent and 25 percent, from a declining base in recent years.
   Some of the revenues decline is being offset by efficiency gains and better pricing possible due to better service and reliability. The company said it expects its efficiency initiative to yield $350 million in savings this year.
   The domestic coal decline is being offset by coal exports that are projected at about 25 million tons for 2016 as the global market for coal slightly improves.
   CSX also said it will invest in extending sidings at intermodal ramps to handle longer trains, more intermodal terminals, and double-stack clearance projects to attract more cargo that now moves by truck.