CSX Corp.'s (CSX) third-quarter profit dropped 23% as revenue
and volumes dropped by double digits for the third consecutive
quarter. But the company said it believed the worst of the
recession was over.
Shares were up 2.3% at $45.30 in after-hours trading as earnings
topped Wall Street's expectations. The stock is up by about a third
this year.
The railroad company said while volumes declined across the
business, the rate of decline continued to slow in nearly all
markets. Still, President and Chief Executive Michael Ward warned
of weak demand for CSX's coal business "well into 2010."
The third-largest U.S. railroad by revenue reported earnings of
$293 million, or 74 cents a share, down from $380 million, or 93
cents a share, a year earlier.
Revenue dropped 23% to $2.3 billion amid a 15% decline in
volumes. In July, the company foresaw a double-digit drop in
third-quarter shipping volume, but the decline was lower than the
first two quarters of the year.
Analysts surveyed by Thomson Reuters expected per-share earnings
of 71 cents on revenue of $2.32 billion.
A number of top railroad executives have said freight volumes
have been improving, although the industry has been more skeptical
about a dramatic rebound. Last month, Ward described the recovery
as "an elongated L," meaning he doesn't expect a quick
recovery.
Still, CSX's results have been helped recently by furloughing
workers and cutting other costs and raising prices. In the latest
quarter, CSX cut operating costs by 24%.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com