FILE PHOTO: A CSX coal train (R) moves past an idling CSX engine at the switchyard in Brunswick, Maryland October 16, 2012. REUTERS/Gary Cameron
April 22, 2020
LOS ANGELES (Reuters) – U.S. railroad operator CSX Corp <CSX.O> on Wednesday withdrew its financial forecasts and said it was evaluating future spending as business shutdowns because of the COVID-19 pandemic weigh on the U.S. economy.
The company, considered one of the most efficient U.S. railroads, also said profit fell less than expected in the latest quarter as cost controls helped offset revenue declines from shipments of products like coal, automobiles and fertilizer.
First-quarter net income declined almost 9% to $770 million, or $1.00 per share. Analysts expected a 94-cent per-share profit for the quarter, according to Refinitiv IBES data.
Revenue for the first quarter fell 5% to $2.86 billion.
COVID-19 lockdowns are taking a toll on railroad volumes in the United States and Canada, Bernstein analyst David Vernon said in a client note.
“The U.S. is marginally worse off, with a material deceleration in merchandise traffic joining weaker trends in coal and intermodal. We do not expect that volumes will improve before the economy re-opens, and we have little clarity on when that will be,” Vernon wrote.
CSX operates mainly in the Eastern United States.
Last Friday, Kansas City Southern <KSU.N> – which operates in Mexico and in U.S. states along the Gulf of Mexico and into the Midwest – withdrew its full-year earnings forecast on coronavirus concerns. Its quarterly profit beat Wall Street estimates as higher Mexico shipments boosted sales in its chemicals and petroleum business.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Chris Reese and Peter Cooney)
