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CSX announces fall in earnings on weak volumes

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Dry Bulk,

US rail company CSX has announced 3Q16 earnings of US$455 million – down from US$507 million in 3Q15 on weaker volumes. Revenue was US$2.71 billion, down from US$2.94 billion a year ago.

The 8% fall in revenue matches an 8% fall in volume demand, including a 21% year-on-year fall in coal volumes.

This fall in volume was partially offset by a 7% improvement in expenses, however, driven by US$112 million in efficiency gains and US$53 million in volume-related cost reductions.

“CSX continues to drive strong cost performance and efficiency in this dynamic market environment,” said Chairman and CEO, Michael Ward.

The company’s cost-cutting – which has included laying off workers and mothballing railcars – helped the company beat analyst expectations. Analysts surveyed by Thomson Reuters expected revenue of US$2.69 billion.

Operating income fell 10% in the quarter to US$841 million, while, the operating ratio rose 70 basis points to 69%.

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