OMAHA, Neb. (AP) — CSX Corp. said Tuesday that its fourth-quarter profit declined 5 percent as coal demand remained weak and total volume slipped 6 percent.
The results raise questions about the health of the overall economy. The Jacksonville, Florida-based railroad hauled fewer agricultural products, chemicals and construction materials, among other categories, in the quarter.
Chairman and CEO Michael Ward forecast that the railroad's earnings per share this year would be below those of 2015, citing "negative global and industrial market trends."
CSX pledged to continue working to cut costs.
The railroad's results suggest that industrial parts of the economy are slowing down while consumer-driven businesses continue doing well, Edward Jones analyst Logan Purk said.
"That's certainly not the best outlook for the U.S. economy," Purk said.
CSX said it earned $466 million, or 48 cents per share, in the last three months of 2015. That's down from $491 million, or 49 cents per share, a year ago.
That was better than the profit per share of 46 cents that the analysts surveyed by Zacks Investment Research expected.
The railroad's $2.78 billion revenue fell short of the $2.92 billion analysts expected, but CSX was able to cut its expenses by 13 percent thanks to cheaper fuel and lower labor costs.
Coal demand has fallen significantly over the past several years because of environmental concerns and because cheap natural gas prices prompted some utilities to switch fuels. Coal carloads fell 32 percent in the fourth quarter.
Intermodal shipments of containers that arrive in ports via ship grew 4 percent for one of the only major bright spots in CSX's traffic report. Automotive shipments improved 5 percent in the quarter.
CSX operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces.
CSX shares have declined 9 percent since the beginning of the year, while the Standard & Poor's 500 index has dropped 5 percent.
The stock dropped 51 cents, or 2 percent, to $23.19 in aftermarket trading Tuesday.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CSX at http://www.zacks.com/ap/CSX
Keywords: CSX, Earnings Report, Priority Earnings