News & Reviews News Wire CSX Transportation reports record earnings as merchandise traffic grows NEWSWIRE

CSX Transportation reports record earnings as merchandise traffic grows NEWSWIRE

By Bill Stephens | April 17, 2019

| Last updated on November 3, 2020


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JACKSONVILLE, Fla. — CSX Transportation reported record first-quarter financial results on Tuesday as revenue gains, merchandise carload growth, and improved operations overcame flat overall traffic volume.

CSX’s net income rose 20%, to $834 million, as revenue rose 5%, to $3 billion. The railroad reported earnings per share of $1.02, a 31% increase that easily topped Wall Street analyst expectations of 91 cents per share, according to I/B/E/S estimates.

The railroad posted a record first-quarter operating ratio of 59.5%, a 4.2-point improvement over the same period a year ago.

Merchandise traffic was up 3% and coal volume grew 5% in the quarter thanks to increased domestic steelmaking and an export market that, while down slightly from last year, remained strong. Intermodal traffic volume declined 5%, as expected, due to the curtailment of lower-volume domestic intermodal lanes both on and off the CSX system.

The merchandise volume gains are a direct result of the railroad’s improved service, CEO Jim Foote says.

From a revenue standpoint, virtually all CSX commodities showed growth. The only business segments that were down were fertilizers and intermodal, which both declined 5%.

CSX’s key operational metrics all showed improvement in the quarter. Average train speed was up 17%, terminal dwell declined 14% — both setting records — and the number of cars online dropped despite flat volume.

On-time train originations held steady at 81%, but on-time arrivals inched up to 64% from 57% a year ago.

The railroad also showed continued improvement in safety measures. The Federal Railroad Administration personal injury rate was down 32% versus a year ago, while the train accident rate declined by 35%.

CSX has 600 locomotives in storage, with its fleet down 10% compared to a year ago, Chief Financial Officer Frank Lonegro says. Since 2016, CSX has pulled 1,200 locomotives from active service as it hauls more tonnage on longer trains.

The increased use of distributed power and energy management systems produced record fuel efficiency for the quarter, Lonegro says.

About 70 trains per day are now using distributed power, Foote says. That’s more than double the number of trains that were scheduled to use distributed power in December, but Foote says the railroad will continue to expand use of the technology that spreads power through the train.

Despite signs of a slowing economy, CSX expects full-year revenue growth in the low single-digit percentage range, Foote says. Much of the growth will come from merchandise traffic, as intermodal growth may be muted amid lane rationalizations and as coal softens in the second half of the year.

4 thoughts on “CSX Transportation reports record earnings as merchandise traffic grows NEWSWIRE

  1. In the Soviet era, railway people had to fill Comrade Kaganovich’s quotas or be sent to the Gulag (or shot). Solution: they’d run several trains of loaded cars back and forth over the line. Same tonnage but many more miles; ton-mile statistics skyrocketed. Another glorious triumph of the Soviet peoples!

    Chairman Foote has emulated them magnificently. Most recently we’ve heard intermodal traffic through Atlanta to Charlotte will be routed to Savannah then combined with a train from Florida for the trip to Charlotte.That’s 765 miles vs 315 miles on the direct SAL line, more than double the ton-miles for the same traffic. If there’s a seasonal tonnage decline this will obscure it. Another glorious triumph of PSR!

    We see the same in other metrics: reduced yard dwell and yard labor expenses to having switching done on line-of-road by the road crews. That and the amount of taxi-time spent by crews when trains outlaw is not reported as a performance metric. He’s touted the aim of longer trains to overcome crew costs. Yes, we see longer trains but is it productive traffic? Just last night I saw one train eastbound FROM Charlotte in which half its consist was empty intermodal platforms. It met a westbound in my town and more than half it’s consist was empty platforms GOING TO Charlotte.

    And how about last year’s 98% increase in ‘other’ revenues? ‘Other’ is a category of minor, incidental income such as sale of land where a hump yard used to be or the sale of mothballed locomotives, NOT income from CSX’s primary business, which all showed declines! No, the actual numbers were not shown. Again investors – mostly institution investors – are fooled.

    As writer A. Solzhenitsyn said of the Soviets, “Untruth did not begin with us nor will it end with us.”

    PS – Unlike the Chairman I do have rail operations experience with CSX predecessor SCL. I successfully implemented several things he calls PSR – with the teamwork of my crews. But honestly, several of those innovations were an outgrowth of UP’s early 1970-era practices I’d read in …. TRAINS!

  2. One of these days maybe trains will be 4 miles long with one train a day each way at 25 mph with all single track lines. How is that for service?

  3. Volume is showing growth and is up. Let’s see. Two years ago they got rid ( chased away or turned away) 35-40% of their business. With all that excess capacity it’s not hard to move a few more cars these days on longer trains.

    A few days ago was in Bay St. Louis’MS which is on on CSE’s ex L & N New Orleans Mobile line. Got stuck at crossing. Trains were normally 90 to 110 cars long. This monster was 224 cars long and moving at no more than 15 mph. I didn’t mind (enjoy counting cars) but other drivers were PO’ed. Stopped in a business (restaurant) a block away. Manager said that is the NEW normal at RR crossings in town. Everyone hates the long trains. Someone else said that some are even longer, between 250 & 275 cars. Everyone also said they usually pass through at the busiest times of the day and it hurts these businesses.

    Wall Street and the stock holders are luving it but everyone else HATE CSX.

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