CSX reports 7 percent gain in third-quarter earnings Greater efficiency in rail unit cited

October 16, 1991|By John H. Gormley Jr.

CSX Corp., the Richmond, Va.-based transportation giant that employs about 3,000 people in Maryland, reported yesterday that its earnings for its latest quarter increased 7 percent from last year, a gain the company attributed largely to efficiency gains in railroad operations.

John W. Snow, the chairman and chief executive officer of CSX, said that the third-quarter results "reflect substantial progress achieved by greater focus on operating discipline."

Earnings for the quarter were $108 million, up from $101 million during the comparable period a year ago.

Rail revenues were up 3 percent in the quarter, to $1.3 billion. But the profitability of the rail operations far outpaced the revenue gains, as operating income surged 21 percent, to $160 million, compared with $132 million for the third quarter a year ago.

The rail unit was able to improve its contribution to profits largely through greater operating efficiencies, including lower fuel costs and a better safety record. Mr. Snow called the results from rail operations "most encouraging" and said they "reflect substantial progress achieved by greater focus on operating discipline."

Train accidents dropped 56 percent for the quarter. The improved safety performance meant CSX experienced fewer accidents per mile than any other major railroad, CSX said, citing the most recent statistics compiled by the Federal Railroad Administration.

The third quarter was the first time this year that CSX's rail revenue or operating income had shown an improvement over the comparable quarter a year ago.

Joel Price, an analyst who follows the company for Donaldson, Lufkin & Jenrette, said, "The railroad did excellently. They've done all the things they've been talking about doing."

But he questioned whether the cost savings CSX has achieved will continue to mean increased profits.

Mr. Price suggested that CSX and other railroads will experience increasing pressure from shippers to share their efficiency gains by lowering rates.

As competitive pressure mounts, Mr. Price expects the railroads to fight for market share by lowering rates and profit margins.

He said that the winning railroads would benefit. But the losers of the fight would end up moving less traffic for less profit per unit, Mr. Price said.

Three months ended 9/30/91

Revenue ... ... ... ... ... ... Net ... ... ... ... ... ... Share

'91 2,205,000,000 ... .. .. .. 108,000,000 .. ... ... ... 1.07

'90 2,063,000,000 ... .. .. .. 101,000,000 .. ... ... ... 1.01

% change ... +6.9 ... ... .. .. +6.9 ... ... ... .. ... ... +5.9

Nine months ended 9/30/91

Revenue ... ... ... ... ... ... Net ... ... ... ... ... ... Share

'91 6,360,000,000 ... .. .. .. 280,000,000 .. ... ... ... 2.80

'90 6,018,000,000 ... .. .. .. 287,000,000 .. ... ... ... 2.84

% change ... +5.7 ... ... .. .. -2.4 ... ... ... ... .. ... -1.4

Life Technologies Inc.

The Gaithersburg-based maker of specialty chemicals and other products used in biotechnology research said that its earnings fell 20.5 percent during the quarter that ended Sept. 30 despite a 7.5 percent gain in revenue.

The company said its earnings were held down by lower investment income, which fell because the company gave a special dividend of $51.9 million to shareholders earlier this year. Operating income, which excludes the investment gains, rose 6 percent during the period.

Three months ended 9/30/91

Revenue ... ... ... ... ... ... Net ... ... ... ... ... ... Share

'91 41,088,000 ... ... ... ... 2,837,000 ... ... .. .. .. 0.19

'90 38,222,000 ... ... ... ... 3,569,000 ... ... .. .. .. 0.25

% change ... +7.5 ... ... ... .. -20.5 ... ... ... .. .. .. -24.0

Nine months ended 9/30/91

Revenue ... ... ... ... ... ... Net ... ... ... ... ... ... Share

'91 126,118,000 .. ... ... ... 9,670,000 .. ... ... ... .. 0.65

'90 111,609,000 .. ... ... ... 10,519,000 ... ... .. .. .. 0.74

% change ... +13.0 ... ... ... -8.1 ... ... ... ... .. .. .. -12.2

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.