CSX Corp. (CSX) Tuesday reported an increase in profit for the first quarter, as lower expenses helped the railroad transporter offset a decline in revenues. Both earnings and revenues for the quarter came in ahead of analysts' expectations, driven by growth at merchandise and intermodal divisions.
Meanwhile, the company announced a new buyback plan of $1 billion and also boosted its quarterly dividend.
CSX' revenues declined year-over-year, despite growth at merchandise and intermodal units, hurt mainly by lower utility coal shipments. Results of railroad transporters are a vital indicator of the buoyancy of an economy.
Coal revenues slipped 13 percent to $726 million, as volumes dropped 10 percent, reflecting utility stockpiles, lower natural gas prices and overall softening of the European economy.
Commenting on the results, Chief Executive Michael Ward said, "CSX continues to create value by supporting its customers with high levels of service in an economy that is still gradually recovering. At the same time, we are prepared for the economy to accelerate and have great confidence in the long-term outlook for the business."
Revenues at merchandise segment, which includes agricultural, industrial, and housing and construction, rose 2 percent to $1.72 billion, while volumes inched down 1 percent.
Intermodal segment revenue improved 4 percent to $404 million as volumes rose 3 percent.
CSX' revenues for the first quarter dropped to $2.96 billion from $2.97 billion last year. Analysts polled by Thomson Reuters expected revenues of $2.92 billion for the quarter.
Jacksonville, Florida-based CSX said its profit for the first quarter improved to $459 million or $0.45 per share from $449 million or $0.43 per share last year. Analysts anticipated earnings of $0.40 per share for the quarter. Analysts' estimates typically exclude special items.
Operating expenses, as a percentage of revenues, decreased 70 basis points to 70.4 percent from 71.1 percent last year.
CSX announced a new share buyback program of $1 billion, which is authorized to being immediately and expected to be complete over the next 24 months.
The company also lifted its divided by 7 percent to $0.15, payable on June 14 to shareholders on record as of May 31.
CSX closed Tuesday at $24.14, up $0.67 or 2.85%, on the NYSE. The stock slipped $0.14 or 0.58% in after hours.
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