CSX Moderates Outlook for 2016 Coal Volume Declines
September 07 2016 - 11:59AM
Dow Jones News
By Tess Stynes
CSX Corp. (CSX) moderated its 2016 guidance for declines in coal
shipments, a major source of revenue for railroad operators, citing
an improved outlook for coal exports.
The Jacksonville, Fla., company's shares, up 10% this year, rose
1.8% to $28.63 in recent trading.
CSX and other railroad companies have been hit as weak demand
for coal in recent years has contributed to lower freight
volume.
At an industry conference on Wednesday, CSX Finance Chief Frank
Lonegro said the company now expects coal exports to reach roughly
25 million tons this year, compared with the company's previous
estimate of about 20 million tons, citing modest improvements in
global markets.
As a result, CSX now expects its 2016 coal market shipments will
decline between 20% and 25%, compared with its earlier view for a
drop of roughly 25%.
Mr. Lonegro said the company expects its per-share earnings for
the third quarter will come in slightly below the 47 cents a share
CSX reported for the second quarter. Analysts polled by Thomson
Reuters projected per-share earnings of 45 cents.
CSX expects overall freight volume declines at the high end of
its previous estimate for a drop in the mid to high single digits
on a percentage basis. Mr. Lonegro said CSX expects the lower
volume will be partly offset by improving efficiency and higher
pricing.
CSX has met or exceeded earnings expectations in recent
quarters, having responded to sector turmoil with efficiency moves
that included layoffs and the mothballing of trains.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
September 07, 2016 11:44 ET (15:44 GMT)
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