Higher shipping rates on everything from coal to cars boosted the third-quarter profit of freight railroad CSX Corp.
The increased rates offset sluggish volume growth in a weak economy. Railroads are considered an economic barometer since they carry many products used by industry and consumers. While consumers and economists have worried about a possible recession, railroad executives, including those at CSX, have been optimistic that they could keep raising prices _ and CSX's results seemed to confirm that view.
CSX reported a 12 percent increase in net income to $464 million, or 43 cents per share, matching the forecast of analysts surveyed by FactSet. A year earlier, the company earned $414 million, or 36 cents per share.
Revenue grew 11 percent to $2.96 billion. Analysts had forecast $2.97 billion.
The revenue increase outstripped a mere 1 percent gain in volume. Coal volumes fell 1 percent, but the revenue per unit of coal shipped rose 16 percent. Intermodal shipments _ containers that also move on trucks or ships _ were flat, but revenue per unit increased 15 percent.
CSX has been helped by coal exports to China and other countries, offsetting weakness in shipments to U.S. utilities. The exports are crucial, because coal makes up about one-third of CSX's business.
Revenue from shipping chemicals, autos, metals and fertilizer rose between 8 percent and 24 percent.
Revenue from food and other consumer products rose a more modest 3 percent, and volume was roughly flat. CSX blamed that on weakness in housing, appliances and alcohol _ the latter due to higher beer inventories.
The Jacksonville, Fla.-based company operates freight trains in the eastern half of the U.S. and Canada. It was the first major U.S. railroad to report third-quarter results. Union Pacific Corp. is scheduled to report earnings on Thursday.
Costs climbed even faster than CSX revenue in the third quarter _ up 13 percent, led by a 48 percent jump in fuel spending. Fuel averaged $3.13 a gallon, up from $2.17 a year ago. Wages and healthcare costs also increased.
Per-share earnings were helped by a stock-buyback program that reduced the number of shares 6 percent from a year earlier.
Chairman and CEO Michael J. Ward said that the company's results improved "even as the economy moderated."
Before the results were released, CSX shares rose 95 cents, or 4.7 percent, to end regular trading at $21.34. In extended trading, they fell 35 cents to 20.99.