Railroad operator CSX Corp. (CSX) Tuesday said its third quarter profit declined from last year, hurt by lower volume as well as lower fuel surcharge recovery, amid a broad-based weakness in the economy. The company's quarterly earnings, however, exceeded analysts' expectations, helped by lower expenses and its wide range of productivity initiatives.
The Jacksonville, Florida-based company posted net earnings of $293 million or $0.74 per share for the third quarter, down from $382 million or $0.94 per share in the prior year quarter. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.71 per share for the third quarter. Analysts' estimates typically exclude special items.
Operating income for the quarter slipped to $598 million from $733 million in the previous year quarter. The company achieved an operating ratio of 73.9% for the quarter.
Third quarter revenues declined 23% to $2.29 billion from $2.96 billion in the same quarter last year, hurt by a 15% decline in volume and lower fuel surcharge recovery. Twelve analysts had a consensus revenue estimate of $2.32 billion for the third quarter.
Revenue from rail segment dropped to $1.99 billion from $2.56 billion, while intermodal revenue fell to $303 million from $399 million in the year-ago quarter.
Total volume slipped 15% to 1.47 million units from 1.73 million units in the previous year quarter.
"While volumes declined across the business, the rate of decline continued to slow in nearly all markets compared to the second quarter," the company said.
Total merchandise volume fell 17% to 545 thousand units, and revenue per unit was down 8% to $2,048 for the third quarter, as continued weakness in the housing and construction, automotive and consumer goods markets significantly reduced demand for most merchandise markets.
Total coal volume declined 18% to 382 thousand units, and revenue per unit fell 2% to $1,780 over a year ago, due to lower demand from electric utilities and a weaker export market.
Automotive volume decreased 28% to 57 thousand units, and revenue per unit slipped 10% to $2,228 for the third quarter, as lower consumer demand and inventory corrections within the auto industry reduced new car production.
Total rail volume dropped 18% to 984 thousand units, and revenue per unit fell 5% to $2,018 from the prior year quarter.
Total intermodal volume slipped 10% year-over-year to 481 thousand units, and revenue per unit declined 16% to $630 over a year earlier.
Total expense for the third quarter eased to $1.69 billion from $2.23 billion in the previous year quarter, as the company right-sized its train network and implemented a wide range of productivity initiatives.
CSX noted that it continued to improve its network efficiency and safety while reducing operating costs by 24% over last year.
For the nine-month period of 2009, CSX reported net earnings of $847 million or $2.14 per share, compared to $1.1 billion or $2.71 per share in the year-ago period.
Revenue for the period decreased 22% to $6.72 billion from $8.58 billion in the previous year period.
Looking ahead, Michael Ward, chairman, president and CEO of CSX, said, "The third quarter reinforces our view that the worst of the recession is likely behind us. At the same time, our coal business will be impacted by weak demand well into 2010."
Association of American Railroads, or AAR, a railroad policy, research and technology organization, recently reported that current rail traffic continues to reflect down economy. In the month of September, U.S. Freight railroads fell 14.2% from last year. Rail-car loadings began dropping last fall, as world-wide trade lurched lower. However, September's decline was the smallest in percentage terms since December, indicating that the economy might be showing signs of a rebound.
According to an AAR report, CSX's total traffic for the quarter to date, through September 26, dropped 15.3% to 1.36 million from 1.60 million in the same period last year. Total carloads fell 17.7% year-over-year to 919,625, with sharp falls in most of the segments, despite Farm Products that recorded a 35.2% growth in traffic. Total Intermodal traffic was down 9.6% to 435,892, with a 27.5% fall in trailers and 7.1% decline in containers.
Among others in the industry, Montreal-based Canadian National Railway Co. (CNI,CNR.TO) is slated to report its third-quarter results on October 20. Analysts expect earnings of $0.82 per share for the quarter. Revenues for the quarter are estimated to be $1.86 billion, representing a 14.2% decline from last year.
CSX closed Monday's regular trading session at $44.28, down 63 cents or 1.40%, on a volume of 4.86 million shares. In after-hours, the shares gained $1.07 or 2.42%.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.