Railroad CSX 3Q profit jumps 43 percent

AP News
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Posted: Oct 12, 2010 5:28 PM
Railroad CSX 3Q profit jumps 43 percent

Railroad CSX Corp. said Tuesday third-quarter earnings soared 43 percent as its trains ran more efficiently and shipments rose.

The Jacksonville, Fla., company is moving more freight with fewer cars and locomotives to control costs as the economy gradually improves. It's bringing back some employees it furloughed during the recession, but slowly, to contain expenses. The railroad is also increasing shipping prices for customers, allowing it to boost revenue while shipments slowly rise.

Shipments of cars and car parts improved the most in the third-quarter, driven by a boost in car and truck production. Intermodal shipments _ transfers from trucks to trains _ also accelerated as more companies chose to ship goods by rail. International shipments also increased due to new business, inventory restocking by U.S. customers and early holiday shipping.

Coal shipments improved, as demand grew for export shipments of coal used in making steel. That was offset by lower shipments to utilities still working through the stockpiles they have on hand.

CSX, which like other railroads is a window on the country's broader economic health, said shipments of lumber, food and retail goods were flat _ indicating the construction market and consumer spending still lagged in late summer and early fall. In the consumer segment, CSX said higher demand for refrigerated goods and alcoholic drinks was offset by continued weakness in demand for appliances.

The railroad runs its signature blue and yellow locomotives from Canada to Florida and west to the Mississippi River. It earned $414 million in the third quarter, or $1.08 per share, compared with year-earlier results of $290 million, or 73 cents per share.

Revenue rose 16 percent from the prior year to $2.67 billion.

Thomson Reuters says analysts expected a profit $1.04 per share on revenue of $2.66 billion.

Overall, shipments were up 10 percent. Automotive shipments rose the most, by 44 percent.