CSX Corporation's First-Quarter Earnings Fall, but 2014 Growth Expected

Railroad traffic picked up slightly in the first quarter and that resulted in better-than-expected earnings for railroad operator CSX Corporation (NYSE: CSX  ) , which reported results this afternoon.

Overall volume was up 3% in the first quarter and revenue grew 2% to $3.0 billion. But bad weather throughout the quarter resulted in a 16% decline in operating profit to $739 million, and net income fell 14% to $398 million, or $0.40 per share. CSX estimated that weather-related disruptions increased expenses by approximately $0.06 per share, and impacted revenue contribution by about $0.02 to $0.03. Analysts had already priced in the bad weather, expecting earnings of $0.37 per share, so the declining results weren't a huge shock.  

The rest of 2014 is expected to improve significantly because management still expects "modest full-year earnings growth for 2014". One of the drivers will be stronger demand for coal, which is gaining some demand because natural gas prices have risen sharply this winter.

Confidence in improving earnings throughout the year has also given CSX confidence to increase its dividend 7% to $0.16 per share quarterly. That's a 2.3% dividend yield for investors at today's closing price, which is solid given the stability of the rail business.

 


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2916586, ~/Articles/ArticleHandler.aspx, 7/29/2014 11:11:59 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement