CSX earnings slowed by weather but finish ahead of estimates


CSX (CSX) +0.9% AH after Q1 earnings fell 14% Y/Y, caused largely by harsh winter weather across much of its railroad network, but beat expectations, and revenue rose 2% to $3.01B as it hauled 3% more freight.

CSX says the early 2014 weather difficulties cost it $0.08-$0.09/share in increased expenses and lost revenue.

Coal volume declined 1%, intermodal shipments rose 5%, and merchandise volume added 2%, driven by growth in agricultural products and chemicals shipments.

Expects modest FY 2014 earnings growth on the strength of broad-based merchandise and intermodal gains and an improving domestic coal environment.

Approves a 7% increase in the quarterly dividend to $0.16/share.

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Comments (8)
  • deercreekvols
    , contributor
    Comments (9595) | Send Message
     
    So much for the expected "bad" news. (CSX) beats estimates!

     

    All aboard!
    15 Apr 2014, 05:02 PM Reply Like
  • A. ORDOOBADI
    , contributor
    Comments (19) | Send Message
     
    Thanks for the information. Regards,
    15 Apr 2014, 05:07 PM Reply Like
  • worldbank
    , contributor
    Comments (444) | Send Message
     
    deercreekvols-
    Please look at the CSX report. CSX's operating income declined 16 percent to $739 million and the operating ratio increased 520 basis points to 75.5 percent. They sum up by saying "company remains confident in its ability to sustain DOUBLE-DIGIT earnings growth and margin expansion for its shareholders in 2015 and beyond. The company expects to sustain a mid-60s operating ratio longer-term", which currently stands at 75.5. What about 2014 you ask? "CSX continues to expect modest full-year earnings growth". I really don't understand at this point in time how CSX can go from modest growth (2% net revenue growth), a 14% drop in net earnings and an 11% drop in EPS in Q1 to double-digit growth in 2015. Take a look at 2013 Q1 earnings of $462M, then look at Q4 earnings of $426M and now Q1 of $398M. This train is not leaving the station in the correct direction.
    15 Apr 2014, 05:16 PM Reply Like
  • deercreekvols
    , contributor
    Comments (9595) | Send Message
     
    If you don't like what you see, don't invest in the company.

     

    I like what I see in (CSX) and continue to add shares.

     

    To each his own.
    15 Apr 2014, 06:35 PM Reply Like
  • Philip Hettich
    , contributor
    Comments (134) | Send Message
     
    Im also concerned by the ever increasing ratio. Management keeps forecasting to get the ratio more down to a level of 60%, but each quarter they deliver an increase. A big part of that increase might be attributable to the harsh weather, but last quarter csx has also failed to get more lean.
    I initially bought csx because of its potential to increase net income by efficiency impovements, however i would love to see athe management start to deliver on their goal anytime soon. Otherwise nsc might be the better choice.
    15 Apr 2014, 06:28 PM Reply Like
  • Philip Hettich
    , contributor
    Comments (134) | Send Message
     
    Im also concerned by the ever increasing ratio. Management keeps forecasting to get the ratio more down to a level of 60%, but each quarter they deliver an increase. A big part of that increase might be attributable to the harsh weather, but last quarter csx has also failed to get more lean.
    I initially bought csx because of its potential to increase net income by efficiency impovements, however i would love to see athe management start to deliver on their goal anytime soon. Otherwise nsc might be the better choice.
    15 Apr 2014, 06:28 PM Reply Like
  • dancing duke
    , contributor
    Comments (180) | Send Message
     
    It can certainly be done. Just look at CNI and CP who have constantly improved their operating ratios in a very meaningful way, and in a much harsher climate than Csx operates in.
    It can be done and You will probably see a big improvement in CSX next quarter
    15 Apr 2014, 07:04 PM Reply Like
  • worldbank
    , contributor
    Comments (444) | Send Message
     
    brktw-

     

    Right now it's difficult for rails in the east. They both need coal, they both need a better economy and they run down the same streets which makes pricing of services very competitive. If GDP were in the 3.5%-4% range, they both would be doing much much better. However, with ~ 1.5% - 2% GDP I think it's difficult for either to increase their margins in a meaningful way, let alone double digits.
    15 Apr 2014, 07:14 PM Reply Like
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