CSX Says Third-Quarter Earnings Will Decline
CSX Corp. has announced that third-quarter earnings will trail both the 2015 period and second quarter profit because freight volumes have slumped.
The railroad, based in Jacksonville, Florida, told investors on Sept. 7 that earnings on a per share basis would trail the second quarter level of 46 cents per share. In last year’s third quarter, earnings were 50 cents per share.
Chief Financial Officer Frank Lonegro said “earnings per share are expected to decline slightly from second quarter levels, based on high single digit volume reductions that are partially offset by improving efficiency benefits and strong pricing gains that reflect a service product that meets and exceeds customer expectations”. The forecast was in line with analyst expectations, as measured in a Bloomberg News survey, that net income would drop sequentially.
Lonegro also said coal tonnage for 2016 would drop between 20% and 25%, even though export coal market conditions have shown “modest improvement”.
CSX, which has relied on expense reductions and efficiency steps to counter falling revenue and buoy earnings, now anticipates that productivity-related savings will top $350 million in 2016, which represents an improvement from its earlier projection.
Separately, software provider MercuryGate International Inc. said its transportation management system, or TMS, has been joined in an integration partnership with CSX’s intermodal business. The software is being used to manage RailPlus, CSX’s newly named door-to-door intermodal service, from MercuryGate.
“MercuryGate is committed to meeting the evolving needs of the transportation industry. By providing a seamless connection to ShipCSX, we are making it easier for our customers to access intermodal rail capacity,” said CEO Monica Wooden in a statement.
Parker McCrary, CSX’s director of product development, said RailPlus is designed “to provide customers a seamless and effortless experience through better technology, tools and service.”
