OMAHA, Neb. - Railroad operator CSX Corp. said continued weak coal demand contributed to a 3 per cent decline in fourth-quarter net income. The results still beat Wall Street expectations as other sectors improved.
The Jacksonville, Fla.-based railroad on Tuesday reported net income of $443 million, or 43 cents per share, in the last three months of 2012. That's down from $457 million, or 43 cents per share, in the previous year's quarter.
CSX said its revenue declined 2 per cent to $2.9 billion from $2.95 billion a year earlier. It says declines in coal shipments more than offset gains in intermodal and merchandise shipments.
Analysts surveyed by FactSet expected CSX to report earnings of 39 cents per share on revenue of $2.84 billion.
CSX stock was trading up 1.6 per cent, or 34 cents, at $21.15 in after-hours trading Tuesday after losing 10 cents in the regular trading session.
The weak coal demand that began with last year's mild winter and cheap natural gas prices continued to create challenges for CSX in the quarter.
Coal revenue fell 18 per cent to $747 million in the fourth quarter. The increases in automotive, intermodal and crude oil shipments weren't quite enough to offset coal's decline.
CSX Chairman, CEO and president Michael Ward praised the results.
"CSX continues to demonstrate the underlying strength of its business model, the ability to respond quickly to significant events in the marketplace, and a steadfast focus on creating substantial shareholder value over the long term," Ward said.
The other major freight railroad in the eastern United States, Norfolk Southern Corp., also reported dealing with coal challenges. Norfolk Southern said its fourth-quarter profit fell 14 per cent to $413 million, or $1.30 per share, because its coal revenue dropped 23 per cent. That's down from $480 million, or $1.42 per share, a year earlier.
For all of 2012, CSX reported net income of $1.86 billion, or $1.79 per share, on $11.8 billion revenue. That's 2 per cent higher than the previous year's $1.82 billion net income, or $1.67 per share, on $11.7 billion revenue.
CSX operates over 21,000 miles of track in 23 eastern states and two Canadian provinces. CSX will hold a conference call with investors Wednesday morning.
Union Pacific Corp., the biggest railroad in the U.S., will release its fourth-quarter results on Thursday.
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CSX Corp.: www.csx.com