The last time we pulled into this station, rail operator CSX
For the quarter, CSX's revenue ripped 12% higher, aided by strength in agricultural products, fertilizers, and coal. Revenue in each of those segments rose 20% or better. Same-store sales growth of 6.8% was the envy of rundown retailers everywhere, while growth in revenue per unit (a measure of operating efficiency) was smoking. On a comparable basis, operating income leaped 34%, while per-share earnings erupted by 60%.
To be fair, CSX noted in its presentation that part of the leap in operating income stemmed from derailments in the prior year. "Core" earning power was still up 25% after backing out that $38 million impact.
A major contributor to this result was the company's ability to hold nonfuel expenses flat; they were actually down 1% from last year. Also, while fuel costs flew 55%, surcharges to customers minimized the impact on earnings.
Those surcharges are at the heart of a lawsuit filed recently by Archer Daniels Midland
CSX's financial fortitude allowed the company to buy back another $300 million worth of shares in the quarter, which takes the running total close to the $3 billion mark. The regal rail is ready to retire another $3 billion or so by the end of next year, which will help edge earnings ever higher. That industrywide earning power is not to be underestimated. Between CSX, the rest of the Big 5, and Canadian National Railway