SEA-LAND’S LOSSES HIT CSX’S 4TH QUARTER RESULTS
Losses in container shipping and workforce reduction charges within its rail and intermodal businesses have taken their toll on CSX Corp., as the group reported a net deficit after one-time items of $25 million in the fourth quarter of 1999
The group’s loss compared with net earnings of $108 million in the fourth quarter of 1998.
Before one-time charges, CSX reported earnings of $44 million in the latest quarter, compared to $108 million in the year-earlier quarter.
One-time items affecting fourth-quarter 1999 results were an after-tax charge for a workforce reduction program of $34 million at the rail and intermodal units and an additional after-tax loss on the sale of Sea-Land’s international liner business of $35 million.
“Quarterly operating results were adversely affected by a significant loss of Sea-Land’s international business as shippers shifted cargo bookings in anticipation of the closing of the sale of the carrier’s international business to Maersk,” CSX said.
CSX’s container shipping unit made an operating loss of $22 million before one-time charges in the fourth quarter, on revenues of $824 million. Including a fourth-quarter charge on the sale of Sea-Land’s international business, the container shipping business lost $84 million in the latest quarter, compared to an operating income of $16 in the fourth quarter of 1998.
CSX said that it posted an “asset impairment charge” of $315 million in the third quarter on the sale of Sea-Land and a further loss on the disposal of $86 million in the fourth quarter, adding up to a total loss of $401 million. Under an agreement with Maersk, there will be a post closing adjustment on the sale price, expected to be resolved this year, CSX said.
CSX said that its remaining container shipping activities — the CSX Lines domestic container shipping line and the port operating unit CSX World Terminals — are “solid performers.”
Fourth-quarter earnings at CSX also were impacted by substantially higher costs incurred by CSXT, the group’s railroad, in handling heavy fourth-quarter traffic after its takeover of part of Conrail.
Fourth-quarter operating income was $157 million, excluding one-time expenses, compared with $276 million for the prior-year period. Including the one-time expenses, operating income for the 1999 quarter was $40 million, down from $276 million in the previous year.
Operating revenue for the latest quarter totaled $2.7 billion, compared to $2.5 billion a year ago.
For the year, net earnings dived to $2 million, from $537 million in 1998.
Excluding one-time items, earnings were $339 million in 1999, as compared to $428 million in 1998.
Total 1999 operating income before one-time items was $1.02 billion, compared with $1.13 billion in the prior year.