CSX Backs Guidance, but Sees Continued Energy Slump
November 10 2015 - 11:52AM
Dow Jones News
By Anne Steele
CSX Corp. on Tuesday reinforced its guidance for the year but
warned energy market headwinds would damp the rail company's 2016
results.
The Jacksonville, Fla., company said growth in the coming year
will be led by intermodal, or container transport, "as CSX
continues to drive highway-to-rail conversions to capture a share
of the estimated 9 million loads in the East that are
well-positioned for intermodal service."
At the same time, the company said, service for automotive
customers will lead industrial market growth as North American
light vehicle production increases. Still, CSX has been hurt by
declines in coal revenue of more than $1 billion over the past four
years.
"While we expect the energy market headwinds to continue in
2016, we are focused on capturing opportunities in intermodal and
industrial markets, " Chief Financial Officer Frank Lonegro
said.
For the 2016 year, analysts expect revenue to grow 1% and
earnings to grow 5% to $2.09.
CSX said it expects current-quarter earnings per share to
decline slightly compared with the same period in 2014. Analysts
are expecting a 3% decline to 48 cents a share.
The company continues to target mid-single-digit full-year
earnings per share growth as intermodal growth and efficiency
initiatives offset about $450 million in coal revenue declines.
Analysts are looking for $2 a share in 2015.
CSX also said it continues to expect "meaningful margin
expansion" in 2015 and a mid-60s operating ratio longer term.
In the last quarter, per-share earnings came in a penny higher
than expected, though revenue fell 8.8% weighed down by lower
fuel-surcharge revenue and volume declines. Coal volume slipped 18%
in the quarter.
Write to Anne Steele at Anne.Steele@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 10, 2015 11:37 ET (16:37 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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