Railroad operator CSX Corp. (CSX) Tuesday said its fourth quarter profit increased by 23% over last year, helped by lower expenses, notwithstanding a 13% decline in revenues. Nevertheless, the company's total volume remained weak, due to low demand in the coal and merchandise segments.
The Jacksonville, Florida-based company posted net earnings of $305 million for the fourth quarter, up 23% from $247 million in the prior year quarter. Earnings per share rose 22% to 0.77 from 0.63 in the year-ago quarter.
Earnings from continuing operations fell 16% to $305 million or $0.77 per share from $361 million or $0.92 per share in the previous year quarter.
On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $0.76 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Operating income for the quarter declined 16% to $583 million from $692 million over a year ago.
Fourth quarter revenue decreased 13% to $2.32 billion from $2.67 billion in the same quarter last year, hurt by a 7% drop in volume as growth in the intermodal and automotive sectors was more than offset by declines in coal and merchandise. Sixteen analysts had a consensus revenue estimate of $2.39 billion for the fourth quarter.
Revenue from rail segment declined 15% to $1.98 billion, while intermodal revenue grew 2% to $340 million over a year earlier.
Total volume for the fourth quarter slipped 7% to 1.50 million units from 1.60 million units in the previous year quarter.
Total merchandise volume fell 5% to 531 thousand units, and revenue per unit was down 5% to $2,094 for the fourth quarter, due to continued weakness in the construction and consumer goods markets, and significantly reduced demand for most merchandise markets.
Total coal volume declined 23% to 365 thousand units, and revenue per unit fell 3% to $1,756 over a year ago, hurt by lower demand from electric utilities and a weaker export market.
Automotive volume grew 3% to 78 thousand units, volume increased due to a slight improvement in auto sales and the need for manufacturers to replenish inventories depleted by the Cash for Clunkers program.
However, revenue per unit slipped 6% to $2,256 for the fourth quarter, hurt by lower fuel recovery associated with the sharp decline in fuel prices.
Total rail volume dropped 12% to 974 thousand units, and revenue per unit fell 4% to $2,033 from the prior year quarter.
Total intermodal volume rose 5% year-over-year to 524 thousand units, but revenue per unit declined 3% to $649 over a year earlier.
CSX noted that lower fuel prices led to decreased fuel surcharge recovery. However, core pricing remained strong, reflecting high service levels and the overall value of freight rail transportation.
Total operating expense for the fourth quarter declined 12% to $1.74 billion from $1.98 billion in the prior year quarter, due to strong safety, service and productivity.
For fiscal 2009, CSX reported net earnings of $1.15 billion or $2.91 per share, compared to $1.37 billion or $3.34 per share in the previous year.
Annual revenue decreased 20% to $9.04 billion from $11.26 billion in the year-ago.
Analysts expected the company to report earnings of $2.85 per share on revenue of $9.11 billion for the year.
Among others in the industry, Montreal-based Canadian National Railway Co. (CNI,CNR.TO) is slated to report its fourth quarter results on January 26, 2010. Analysts project earnings of US$0.87 per share on revenue of US$1.90 billion for the fourth quarter.
Burlington Northern Santa Fe Corp. (BNI) will release its fourth quarter financial results on January 21. The Street estimates earnings of $1.22 per share on revenue of $3.63 billion for the fourth quarter.
CSX closed Tuesday's regular trading at $50.51, up 47 cents on a volume of 4.48 million shares. However, in after-hours, the share lost $1.81 or 3.58%. The stock has been moving in a range of $20.70 - $52.83 for the past 52 weeks, with an average daily volume of about 3.89 million shares for the past three months.
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