CSX 2Q earnings rise 22 percent on higher prices

AP News
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Posted: Jul 19, 2011 5:32 PM
CSX 2Q earnings rise 22 percent on higher prices

CSX Corp. said Tuesday that its second-quarter earnings rose 22 percent as the railroad made up for slow volume growth by charging its customers higher prices.

CSX, which operates trains in the Eastern U.S. from Florida to Canada and west to the Mississippi River, earned $506 million, or 46 cents per share, compared with $414 million, or 36 cents per share a year earlier.

Revenue rose 13 percent to $3.02 billion. Fuel prices jumped 42 percent, while costs overall rose 10 percent.

Analysts polled by FactSet Research predicted the company would earn 44 cents per share on revenue of $2.98 billion.

Shipping volume overall rose 3 percent. That's higher than the average increase in the second quarter among major U.S. railroads. The Association of American Railroads said total carloads in the April-to-June period rose 0.5 percent compared with a year earlier, much less than the 5.1 percent growth seen in the first three months of the year.

While CSX said volume rose slightly in most segments, revenue rose by double digits for nearly all carloads. Shipments of forest products, food and transfers between trucks and trains, improved the most. Volume in all categories rose by 8 percent.

Forest products, used primarily in building, have risen from historic lows seen during the recession. And transfers between trucks and trains _ intermodal shipments _ rose due to the better fuel efficiency of trains and concerns that driver shortages could affect shipments by truck.

The only shipping categories that lost ground were coal and automotive, both of which had been improving steadily this year. Car shipments were hit by supply disruptions resulting from the Japanese earthquake and tsunami in March.

Coal volume fell on fewer shipments to U.S. utilities. Many are using cheaper natural gas instead. The decline in domestic coal shipments was partially offset by strong demand for coal overseas, especially in Europe, Asia and South America.

The Jacksonville, Fla., company is the first major U.S. railroad to report second-quarter results. Union Pacific, the largest railroad in the U.S., reports earnings on Thursday.

CSX shares rose 37 cents to $25.85 in aftermarket trading. The stock closed up 29 cents in the regular session to end at $25.48.