By Everdeen Mason
CSX Corp. Chief Financial Officer Fredrik Eliasson warned
Wednesday that severe weather will reduce the railroad company's
first-quarter earnings.
Inclement weather has challenged CSX operations and volume and
is expected to cut earnings by 10 cents a share, Mr. Eliasson said
ahead of the J.P. Morgan Aviation, Transportation and Industrials
Conference in New York. The company still expects earnings growth
for the year, though at a more modest rate than previously
seen.
Inventory at coal-fired utility plants in CSX'S service
territory is closer to normal levels, after years of excess
inventory, due to the colder-than-normal winter weather, it said.
However, broad-based growth in the company's merchandise and
intermodal markets, as well as several million new tons of domestic
coal, will help offset the effects.
Falling coal volumes have stung CSX's results in recent
quarters, owing to weak global demand and high domestic
inventories, but its intermodal division has posted stronger
volumes lately. In January, the company reported its fourth-quarter
earnings fell 3.8% on higher expenses.
Broadly, railroads are coming off a record year for intermodal
growth, according to the Association of American Railroads,
surpassing a prior high mark achieved in 2006. But recently,
railroad companies including CSX and Norfolk Southern Corp. have
been hurt by a slump in coal demand from domestic utilities as a
result of low-cost natural gas and high coal stockpiles.
Write to Everdeen Mason at everdeen.mason@wsj.com
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