CSX reports nearly double net earnings

The first in its class to release Q1 results, the railway reported a 4 percent year-over-year decline in volumes and a sharp drop in headcount.    CSX posted record first-quarter 2018 net earnings of $695 million, up from $362 million for the first quarter of 2017, the company reported Tuesday.
   CSX is the first Class I railway to unveil its first-quarter 2018 results.
   During the quarter, CSX’s revenues totaled $2.88 billion, relatively flat from the first quarter of last year’s revenues of $2.87 billion.
   CSX drastically improved its operating ratio, which stood at 63.7 percent, compared to 73.2 percent for the first quarter of 2017.
   However, volumes for the quarter fell 4 percent year-over-year.
   CSX closed out the quarter with 23,019 employees, a sharp drop from the 26,027 employees at the close of last year’s first quarter.
   This largely can be attributed to CSX’s precision scheduled railroading model, implemented by former CSX president and CEO E. Hunter Harrison when he took over in March 2017.
   James Foote, who was named president and CEO in December following the death of Harrison, is an avid supporter of the late leader’s precision scheduled railroading model. “At its core, scheduled railroading is about relentlessly identifying and eliminating every unnecessary step, every unproductive asset, every extra mile and every extra car handling that does not contribute to the quality and consistency of our transportation product,” Foote said in CSX’s 2017 annual report.
   CSX’s planned capital investments for 2018 are expected to total $1.6 billion, the majority of which will be used to sustain core infrastructure, according to its 2017 annual report.
   CSX also said about $200 million will be for positive train control, which is a wireless communication system that can prevent an accident by overriding a conductor to slow or stop a train.
   The Rail Safety Improvement Act of 2008 required PTC implementation across a significant portion of the nation’s rail system by Dec. 31, 2015, but Congress later extended the deadline to Dec. 31, 2018, with the possibility of an additional two-year extension under certain circumstances.
   Although it’s unclear when BNSF will release its quarterly results, Canadian Pacific is announcing its quarterly results this afternoon, followed by Kansas City Southern on Friday morning, Canadian National on April 23, Norfolk Southern on April 25 and Union Pacific on April 26.
   All Class I railways lowered their operating ratios for the full year 2017 and improved earnings, but looming service complaints remain.
    STB Vice Chairman Deb Miller on Tuesday said during a hearing on the implementation of the Surface Transportation Board Reauthorization Act of 2015 that there has been a noticeable drop in service metrics for some carriers and that the board has asked certain railroads to participate in weekly calls with staff from its customer assistance office to monitor their progress.
   Miller said the railroads generally appear to be taking aggressive measures to get their service back to normal, but the STB continues to monitor this issue very closely.