DOW JONES NEWSWIRES
CSX Corp.'s (CSX) first-quarter earnings dropped 30% as weakness
in industrial production, housing and consumer spending lowered
volumes.
The freight sector has been under pressure as the economic
downturn has hurt demand for nearly all goods, pushing traffic down
in nearly every industry linked to freight movement. In response,
CSX, the nation's third-largest railroad by revenue, has furloughed
employees and idled locomotives.
CSX, which operates in 23 Eastern states and the District of
Columbia, reported earnings of $246 million, or 62 cents a share,
down from $351 million, or 85 cents a share, a year earlier. The
prior year's results included a 5-cent gain from an equity earnings
adjustment.
Revenue dropped 17% to $2.2 billion amid a 17% decline in
volume. In January, the company foresaw a double-digit drop in
first-quarter shipping volume, which was also hurt by a drop in
volumes in the agriculture and energy sectors.
Analysts polled by Thomson Reuters expected per-share earnings
of 51 cents on revenue of $2.26 billion.
The railroad operator indicated earlier this year that it could
continue to raise prices because shipping freight by rail remains
more cost-effective for companies. Some railroad customers have
called on Congress to reinstate tighter industry oversight in
response to the industry's pricing hikes.
Standard & Poor's Ratings Service in February said it
believed rail companies, including CSX, will perform better than
other transportation companies, as they benefit from the diversity
of its customers and end markets.
Shares were up 5.8% to $30.04 in after-hours trading. The
company's stock has lost over half its value since September.
-By John Kell, Dow Jones Newswires, 201-938-5285,
john.kell@dowjones.com
