CSX posts 19% earnings drop in first quarter

The Jacksonville, Fla.-based railway posted net earnings of $356 million on revenues of $2.6 billion for the first quarter of 2016, year-over-year declines of 19 percent and 14 percent, respectively.    CSX Corporation’s net earnings for the first quarter of 2016 totaled $356 million, a 19 percent decline from the first quarter of 2015, according to the company’s most recent unaudited financial statements.
   Earnings per share (EPS) dropped from $0.45 per share for the first quarter of 2015 to $0.37 per share for the first quarter of 2016.
   Revenues tumbled 14 percent year-over-year during the first quarter of 2016 to $2.6 billion. CSX attributed the revenue decline to lower fuel recovery, a $95 million year-over-year drop in other revenues related to payments received in 2015 from customers that did not meet their minimum volumes commitments and 5 percent year-over-year decrease in volumes to 1.55 million units.
   For the first quarter of 2016, CSX posted year-over-year volume declines in the agricultural products (down 9 percent), phosphates and fertilizers (down 3 percent), food and consumer goods (down 4 percent), chemicals (down 3 percent), metals (down 18 percent), forest products (down 7 percent) and coal (down 31 percent) sectors.
   However, the railway experienced year-over-year volume growth in the automotive (up 12 percent), intermodal (up 4 percent), minerals (up 3 percent), and waste and equipment (up 6 percent) sectors.
   During the quarter, CSX’s expenses fell 12 percent from the first quarter of 2015 to $1.9 billion, driven by efficiency gains of $133 million, along with lower volume-related costs of $64 million, as CSX reduced its cost structure. Lower fuel prices also helped to bring down the Class I railway’s expenses.
   In 2015, CSX’s full-year EPS stood at $2.00 per share, but looking ahead, CSX Chairman and CEO Michael J. Ward explained the railway expects full-year earnings per share to decline in 2016 due to ongoing coal headwinds, along with other market fundamentals.
   Based out of Jacksonville, Fla., CSX serves the eastern United States, encompassing approximately 21,000 route miles of track across 23 states, the District of Columbia and the Canadian provinces of Ontario and Quebec.