OMAHA, Neb. (AP) — CSX Corp. (CSX) on Tuesday said its third-quarter profit grew 12 percent to $509 million as it hauled more freight amid an improving economy.
The Jacksonville, Florida-based company reported profit per share of 51 cents, beating the 47-cent average estimate of analysts surveyed by Zacks Investment Research.
That's up from 45 cents per share, or $455 million, last year.
The freight railroad posted quarterly revenue of $3.22 billion. Zacks says analysts expected $3.16 billion.
Shares added 65 cents, or 2 percent, to $33.26 in extended trading. The stock has risen 13 percent in 2014.
One of the biggest drivers of the stock's jump this week has been reports that CSX may have rejected a merger offer from Canadian Pacific railroad last week.
It's unclear whether regulators will allow any of the big railroads to merge because of competitive concerns, Edward Jones analyst Logan Purk said.
"On paper, it makes perfect sense," Purk said. "But I think there's a tremendous hurdle with the Surface Transportation Board in getting that approved."
CSX's quarterly results demonstrate the company's earnings power when the economy is growing, although the railroad seems to have little power to increase shipping rates, Purk said.
CSX officials continue to predict modest profit growth this year before double-digit growth in earnings in 2015.
The railroad hauled 7 percent more carloads overall with the strongest growth in chemicals — which include crude oil shipments — and agricultural commodities.
CSX said its coal revenue was essentially stable in the third quarter at $721 million. That's a positive because the railroad has been hurt by weak coal demand over the past several years as many utilities switched from coal to natural gas because of low natural gas prices and concerns about pollution regulations.
CSX Corp. operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces. It is the first major U.S. freight railroad to report quarterly results.
Norfolk Southern Corp. will release its earnings next Wednesday. Union Pacific Corp. will follow with its third-quarter report a day later on Thursday. BNSF railroad's results will be reported later as part of Berkshire Hathaway Inc.'s quarterly report.
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CSX Corp.: www.csx.com