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.
Travis Hoium has no position in any stocks mentioned. The Motley Fool owns shares of CSX. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.