CSX Net Income Falls 20%, Starts Second Quarter on Down Note
CSX Corp. began the second-quarter freight transport earnings reporting season by announcing that net income fell 20% to $445 million, or 47 cents per share, dragged down by a 34% reduction in coal revenue.
The Jacksonville, Florida-based company’s revenue declined 12% to $2.70 billion. A $214 million drop in coal revenue accounted for about 60% of the revenue decline. In last year’s second quarter, CSX earned $553 million, or 56 cents.
Truck/rail freight revenue declined 7% to $416 million, reflecting a 4% decline in shipments handled to 694,000.
The intermodal volume was divided. There was a 5% increase in domestic truck/rail freight, resulting from highway-to-rail conversions and enhanced service offerings, according to a financial booklet of earnings materials.
However, international intermodal declined 16%. CSX blamed “prior competitive losses in international accounts, difficult comparisons from cycling the 2015 West Coast port recovery and the weaker global freight environment.”
“CSX continued to drive strong customer service and network efficiency in a challenging market, which is expected to persist throughout this year,” said Michael Ward, chairman and CEO. “In this environment, the company continues to right-size resources while making strategic investments to transform the company and capitalize on market opportunities to drive long-term value creation.”
Total shipments fell 9%, including the coal and intermodal declines. Profit before interest and taxes slipped 17% to $840 million, producing an operating ratio of 68.9, which was 2.1 percentage points worse than the 2015 period.
