CSX Corp. has announced its 1Q16 net earnings of US$356 million, which equates to US$0.37/share, down from US$442 million, or US$0.45/share, in the same period of last year.
"As we managed through the impact of the continued coal decline and other market forces during the first quarter, CSX took aggressive actions to improve efficiency, reduce costs and streamline resources across the network to further reshape the company," said Michael J. Ward, Chairman and CEO.
Revenue for the quarter declined 14%, reflecting lower fuel recovery, a 5% volume decline and a US$95 million y/y decline in other revenue related to payments received in 2015 from customers that did not meet their minimum volume commitments.
Expenses decreased 12%, driven by efficiency gains of US$133 million and lower volume-related costs of US$64 million as CSX reduced its cost structure in the face of the challenging market environment. In addition, the reduction in the price of fuel decreased fuel expense by US$78 million for the quarter.Including the impact of these cost savings and the decline in other revenue, operating income decreased US$139 million to US $704 million. At the same time, the operating ratio increased 90 basis points year-over-year to 73.1%.
"While CSX delivered strong efficiency gains in the first quarter, we continue to expect full-year earnings per share to decline in 2016 as a result of ongoing coal headwinds combined with other market fundamentals," said Ward. "At the same time, CSX remains focused on meeting and exceeding customer expectations while driving further efficiency savings to maximise shareholder value and achieve a mid-60s operating ratio longer term."
CSX executives will conduct a quarterly earnings conference call with the investment community on 13 April 2016, from 8:30 AM to 9:30 AM Eastern time. Investors, media and the public may listen to the conference call by dialling 1-888-EARN-CSX (888-327-6279) and asking for the CSX earnings call. Callers outside the US, dial 1-773-756-0199.
Edited from press release by Angharad Lock
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