CSX, Kansas City Southern report Q1 growth

   Class I railroads CSX and Kansas City Southern both reported this week first-quarter growth in revenue and profit.
   CSX reported Tuesday its first-quarter net earnings increased 20 percent year-over-year to $834 million. Its earning per share grew 31 percent to $1.02, which was above analysts’ expectations, according to The Wall Street Journal.
   It said it achieved a first-quarter record 59.5 percent operating ratio, down from 63.7 percent in 2018.
   The Jacksonville, Fla.-based company said its revenues rose 5 percent to $3.01 billion, which it credited to a 3 percent merchandise volume growth and “broad-based pricing gains.” Merchandise revenue rose 6 percent to $1.8 billion and was led by the chemical segment’s $586 million in revenue. Agricultural and food products improved revenue by 12 percent to $244 million and forest products boosted revenue 11 percent to $216 million, which marked CSX’s two biggest merchandise gains.
   Coal volumes grew 5 percent and revenue climbed 7 percent ($538 million), but intermodal volume and revenue ($428 million) both declined by 5 percent.
   “Domestic volume declined as rationalization of low-density lanes more than offset growth with existing customers,” CSX said in its quarterly financial report. “International volume increased driven by strong performance with existing customers and new service offerings to inland ports, which more than offset losses from the rationalization of low-density lanes.”
    Expenses fell 2 percent to $1.8 billion, which were “primarily driven by labor efficiencies partially offset by inflation.”
   Kansas City Southern (KSC) reported Wednesday a record first-quarter revenue of $675 million, which was a 6 percent increase over 2018, despite a 1 percent volume decline. The company attributed the volume decline, which included drops of 9 percent in intermodal, 8 percent in automotive volumes and 3 percent in industrial and consumer products, to service interruptions due to teacher protests in Lázaro Cárdenas, Mexico.
   A 21 percent revenue increase in chemicals and petroleum to $168.6 million led the company’s revenue. Agriculture and minerals increased revenue by 8 percent ($122.9 million), energy by 5 percent ($64.4 million) and industrial and consumer products by 2 percent ($149.8 million).
   The revenue increases were partially offset by the 12 percent decrease in intermodal revenue ($79.9 million) and 4 percent drop in automotive revenue ($57.6 million).
   KCS reported a net income of $103 million, down from $145 million in 2018, but its adjusted net income increased 18 percent to $154.9 million. 
   Its operating ratio as reported was 76.2 percent, up from 65.8 percent, but its adjusted operating ratio fell to 64.2 percent, the company said.