Fuel, labor cut earnings, CSX reports

Profits for first quarter down 1 cent a share from analysts' estimate

April 25, 2000|By BRIDGE NEWS

CSX Corp., the third-largest U.S. railway company, blamed disappointing fiscal first-quarter results on higher labor and fuel costs as well as problems related to train congestion.

CSX said yesterday it earned profits of $29 million, or 14 cents a share, during the quarter compared with the First Call consensus estimate of 15 cents a share.

In the same period last year, CSX earned $26 million, or 12 cents per share, after a one-time accounting charge. Before factoring in the one-time noncash accounting charge, CSX earnings for the first-quarter of 1999 totaled $75 million, or 36 cents per diluted share.

"These results are unsatisfactory and reflect sharply higher fuel and labor costs, as well as lingering congestion problems at our railroad," said John W. Snow, chairman and chief executive officer. "We are taking steps to reduce the number of cars on our system and improve network fluidity."

Shares of CSX, which is based in Richmond, Va., rose 31.25 cents, or 1.52 percent, to $20.9375 by the close of trading on the New York Stock Exchange.

Revenues slipped to $2.15 billion, down 15.35 percent from $2.54 billion last year.

CSX improved its rail and intermodal business figures, which rose to $1.8 billion from $1.47 billion in the year ago period. However, expenses also increased to $1.64 billion from $1.19 billion in the same period last year. CSX blamed the increase in expenses on substantially higher year-to-year volumes, network congestion, higher fuel prices and wage increases.

CSX operates the largest rail network in the eastern United States. and also provides intermodal, container-shipping and contract logistics services. CSX operates the third-largest rail system in the United States behind Union Pacific Corp. and Burlington Northern Santa Fe Corp.

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