CSX Corp. said its first-quarter earnings fell 14% as
winter-related disruptions contributed to higher costs and weighed
on the railroad company's revenue growth.
The company estimated that weather-related disruptions increased
expenses by roughly six cents a share during the quarter, and hit
the contribution to revenue by about two cents a share to three
cents a share.
However, the company's board also authorized a 7% increase in
the quarterly dividend to 16 cents a share, an increase of a
penny.
Over the longer term, railroad companies including CSX have been
hurt by a slump in demand for coal used to generate electricity.
Coal has lost major market share to natural gas in recent years as
power generators switch to gas, due to the fuel's low cost as well
as power companies' efforts to meet tighter emissions
regulations.
CSX Chief Financial Officer Fredrik Eliasson had warned in March
that colder-than-usual weather would pose operational challenges
and hurt freight volume for the latest quarter. At the time, the
company had expected the weather-related effects would be mitigated
somewhat by broad-based growth in its merchandise and intermodal
markets, as well as several million new tons of domestic coal.
In the latest quarter coal volume declined 1%, while intermodal
shipments rose 5%. Merchandise volume improved by 2%, driven by
growth in agricultural products and chemicals shipments.
CSX reported a profit of $398 million, or 40 cents a share, down
from $462 million, or 45 cents a share, a year earlier. Revenue
increased 1.8% to $3 billion.
Analysts polled by Thomson Reuters expected per-share profit of
37 cents and revenue of $2.99 billion.
Write to Tess Stynes at tess.stynes@wsj.com
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