OMAHA, Neb. (AP) — CSX Corp.'s first-quarter profit grew 11 percent as it benefited from lower fuel costs, and the railroad announced plans Tuesday to repurchase $2 billion of stock.
CSX reported $442 million in net income, or 45 cents per share, in the first quarter. That's up from $398 million, or 40 cents per share, a year ago when severe winter weather slowed traffic.
The Jacksonville, Florida-based railroad sounded considerably more optimistic than its biggest competitor in the Eastern United States. Norfolk Southern warned investors Monday that its first-quarter earnings would disappoint because of weak coal demand, especially for exports.
"CSX's core earnings remain strong and we are continuing our drive to provide excellent service for our customers and value for our shareholders," said Michael Ward, the railroad's chairman and CEO.
CSX said its revenue was relatively flat at $3.03 billion as the volume of freight it delivered increased only 1 percent during the quarter. The 39 percent drop in fuel costs to $270 million provided a key boost for CSX.
The results chugged ahead of Wall Street expectations. The analysts surveyed by FactSet expected earnings per share of 44 cents on revenue of $3.006 billion.
Edward Jones analyst Logan Purk said CSX's results were good and should give investors confidence that the weakness Norfolk Southern warned about Monday is likely confined to that railroad.
"What's reassuring is it appears to be a Norfolk Southern problem, not a railroad industry problem," Purk said.
CSX said its board approved spending $2 billion to repurchase its own stock over the next two years. The railroad also plans to increase its quarterly dividend to 18 cents per share in June from the previous 16 cents per share.
CSX shares gained 13 cents during the day and another $1.18 in after-hours trading Tuesday to sell for $34.39.
Norfolk Southern's stock slide more than 4 percent during Tuesday's trading, and it fell another $1.18 to $99.31 after hours. That Norfolk, Virginia-based railroad is scheduled to report its full earnings on April 29.
Railroads carry cars, chemicals, fuel, crops, lumber and containers of imported goods across the nation, so their earnings reflect the health of many industries.
CSX operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces.
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