CSX 1Q profit jumps 22% on higher rates despite service woes
OMAHA, Neb. (AP) — CSX railroad struggled to keep up with demand in the first three months of the year but still manage to deliver 22% more profit thanks to higher shipping rates offsetting a slight decline in the number of shipments it handled.
The Jacksonville, Florida-based railroad said Wednesday it earned $859 million, or 39 cents per share, in the first quarter. That’s up from $706 million, or 31 cents per share, a year ago.
The results beat Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 38 cents per share in the latest quarter.
In recent weeks, several groups of railroad shippers have complained to regulators about rail shipping delays that have forced grain mills, ethanol plants and food producers to idle their plants at times while waiting for trains. Federal regulators plan to hold a hearing on the issues next week.
CSX CEO Jim Foote said the key to improving service is hiring more workers, and the railroad has been making progress on that this year. And staffing has improved since the omicron wave of the pandemic peaked in January.
At the start of the year, CSX had only about 6,218 active employees on average at the height of the omicron wave in January. That jumped to 6,459 in February and has continued growing to hit 6,629 on average in April as more new employees complete their training.
Foote said demand for the railroad’s services remains strong but volume was down 2% in the quarter as CSX struggled to handle all the shipments.
The freight railroad’s revenue jumped 21% to $3.41 billion in the period, which also beat Street forecasts. Five analysts surveyed by Zacks expected $3.29 billion.
CSX said it now expects revenue and operating income to grow at a double-digit rate this year because demand remains so strong.
CSX Corp. is one of the nation’s largest railroads, and it operates more than 21,000 miles (34,000 kilometers) of track in 23 Eastern states and two Canadian provinces. It recently got approval to add about 1,200 miles of track and three additional states to its network later this year when it acquires Pan-Am Railways in the northeastern United States.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CSX at https://www.zacks.com/ap/CSX
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