Railroad transporter CSX Corp. (CSX), Tuesday reported a 23 percent rise in earnings for the first quarter as strong shipment growth in Merchandise and Intermodal freight segments and higher price realization more than offset a decline in coal volumes.
Both earnings and revenue for the quarter topped Street estimates. CSX shares gained nearly 3 percent in after-hours trade on the New York Stock Exchange, following the announcement of its financial results.
CSX results come amid a pick up in economic conditions as demand for raw materials and goods gain momentum. Results of railroad transporters are a vital indicator of how buoyant or otherwise an economy is.
Commenting on the first-quarter results, CSX Chief Executive Michael Ward said, "CSX is off to a fast start in a year that will be dynamic and challenging. A significant majority of our transportation markets are performing very well and our operations are delivering excellent results."
CSX's total revenue for the quarter grew 6 percent from last year, led by higher volume, pricing gains and fuel recovery.
At Merchandise segment, comprising agricultural, industrial, and Housing sectors, revenue improved 10 percent from last year. Volumes were up 3 percent, helped mainly by growth in automotive and metals. Revenue per unit at the segment grew 7 percent from last year to $2,496.
Intermodal segment revenue jumped 19 percent from last year, with volumes up 9 percent. Revenue per unit totaled $648, up 10 percent from the prior year. This segment involves the transportation of freight in containers multiple modes of transportation.
Coal segment revenue meanwhile slid 5 percent from last year, hurt by a 14 percent decline in volumes. Revenue per unit meanwhile was up 10 percent at $2,514.
"Although utility coal-related headwinds are likely to be stronger in the second quarter, CSX remains on track to achieve year-over-year earnings growth in 2012," said Ward.
Robust revenue growth and cost efficiencies led to a 11 percent improvement in operating income for the quarter and was reflected in a 140 basis point improvement in operating ratio, reported at 71.1 percent.
Jacksonville, Florida-based CSX posted first-quarter net income of $449 million or $0.43 per share, up from $395 million or $0.35 per share in last year.
On average, 25 analysts polled by Thomson Reuters expected earnings of $0.38 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter totaled $2.97 billion, compared to $2.8 billion last year. Analysts expected revenue of $2.93 billion.
CSX closed Tuesday at $22.44, up $0.36 or 1.63%, on a volume of 15.5 million shares on the NYSE. In after hours, the stock rallied $0.58 or 2.58%.
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