CSX Corp. on Tuesday reported revenue fell in the first quarter, as the volume of coal shipments, a key metric for railroads, dropped 31% to continue a trend that has hurt the top line for several quarters.

In February, the Jacksonville, Fla., railroad said earnings in the latest quarter would drop significantly as the railroad expected volume to decline in the mid-to-high single digits. On Tuesday, CSX reported that total volume was down 5% for the quarter.

CSX expects coal volume to decline more than 20% in 2016 and see most other markets also declining year-over-year. Some 20% of CSX's revenue last year came from coal versus an industry average of about 15%.

The company has responded by cutting costs, laying off workers and mothballing railcars.

CSX's stock has rebounded some 16% from a three-year low hit in January but remains more than one-third below its November 2014 high. On Tuesday after hours, the stock edged 0.5% lower to $24.91.

CSX Corp. is the first of the big freight lines to report first-quarter earnings, providing a test case for some analysts who believe that a turnaround could be around the corner. Though results declined from a year ago, earnings aligned with Wall Street expectations, though the company fell short of revenue forecasts.

For the quarter ended March 25, CSX reported a profit of $356 million, or 37 cents a share, down from a year-ago profit of $442 million, or 45 cents a share.

Revenue fell 14% to $2.62 billion.

Analysts surveyed by Thomson Reuters expected earnings to decline 19% to 37 cents on revenue of $2.68 billion.

Rail stocks have been battered for the past year by a combination of slowed global trade, a strong dollar, plunging commodity prices and reduced domestic oil shipments. But recently, some analysts have predicted the first glimmers of relief as certain cargo groups hit bottom and the economic outlook improves.

The first quarter is generally expected to be the toughest for railroads this year, however, because of difficult comparisons to a better quarter a year ago and due to flooding in some Southern states, primarily affecting Union Pacific Corp. and Kansas City Southern.

Through March, total U.S. volumes for railroads fell about 6.5% to nearly 6.5 million carloads, trailers and containers, compared with the same period a year earlier. That compares with an increase of less than 1% in the same quarter a year ago.

Railroads have been hardest hit by a steep drop in coal shipments, down more than 30% in the quarter as power plants switch to cheap natural gas and as exports fall.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

 

(END) Dow Jones Newswires

April 12, 2016 17:25 ET (21:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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