CSX profits flat in Q3 as revenues decline

The railway reiterated its full-year earnings per share guidance despite expectations that coal volumes could drop as much as 10 percent in 2015, leading to a $450 million impact on revenues.    CSX Corporation posted relatively flat profits in the third quarter of 2015, as net earnings dipped 0.39 percent to $507 million compared to the third quarter of 2014, according to the company’s most recent financial statements.
   Earnings per share (EPS) were $0.52 for the quarter, a Q3 record for the company, and $1.52 for the first nine months of 2015, up 2 percent and 6 percent, respectively, from the previous year.
   The Jacksonville, Fla.-based railway reported a 9 percent decline in revenues, however, to $2.94 billion compared with the same period a year ago. Revenues in the first nine months of the year stood at $1.5 billion, up 5 percent from the same period in 2014.
   CSX primarily attributed the decline in revenues to “the combination of lower fuel recovery, a three percent volume decline and continued transition in CSX’s business mix,” which more than offset growth in base rates.
   The company was also able to cut expenses 11 percent thanks to continued low fuel prices, cost reductions associated with lower volumes, and savings from efficiency initiatives.
   CSX said it is still targeting its previous full-year guidance for EPS growth in the mid-single digits despite an expected 10 percent decline in coal volumes and a negative $450 million resulting impact on revenues in 2015.
   “These significant coal headwinds are now also expected to continue in 2016,” the company added.
   Overall volumes at the railway were down 3 percent for the quarter and 1 percent for the first nine months of 2015 to 1.7 million units and 5.1 million units, respectively.
   “CSX’s third quarter results demonstrate the company’s ability to leverage improving service while controlling costs in a dynamic environment where commodity prices and the strength of the U.S. dollar are challenging many of our markets,” CSX Chairman and CEO Michael Ward said of the results. “Our performance supports strong pricing and continued efficiency gains as we continue to drive value for customers and shareholders.”