CSX (CSX 68.49, +4.05, +6.28%) has climbed over 6% after reporting
strong quarterly results and boosting its revenue growth forecast for the full
The rail carrier delivered above-consensus second quarter earnings of $1.01/share on a 5.8% year/year increase in revenue to $3.10 bln, which was also ahead of estimates. The solid results were coupled with an improved outlook. The company expects that revenue growth for the full year will be in the mid-single digits; previous forecasts had called for only slight growth.
Most notably, the company's operating ratio improved to a record of 58.6% from an adjusted 63.5% (unadjusted 67.4%) one year ago.
Total expense declined 8.0% to $1.82 bln. The decline was driven by lower labor and fringe expenses, which were partially offset by higher fuel costs. Operating income grew 34.1% to $1.28 bln.
Looking at the segment breakdown, Chemicals volume was unchanged year-over-year at 169,000 while revenue increased 6.5% to $588 mln. Revenue per unit also increased 6.5%, rising to $3,479. Increased shipments of municipal waste, industrial chemicals, and energy were offset by reduced fly ash shipments.
Automotive volume grew 1.7% to 118,000 while revenue increased 7.5% to $330 mln. Revenue per unit grew 5.7% to $2,797. Stronger demand for trucks and SUVs supported the volume growth.
Agricultural and Food Products volume declined 1.8% to 112,000 while revenue grew 1.9% to $327 mln. Revenue per unit increased 3.7% to $2,920. Losses in the ethanol market were partially offset by higher exports of grains.
Minerals volume increased 3.6% to 86,000 while revenue grew 7.0% to $137 mln. Revenue per unit increased 3.3% to $1,593. Stronger aggregate shipments for construction and paving projects fueled growth in the segment.
Forest Products volume increased 6.0% to 71,000 while revenue increased 10.8% to $215 mln. Revenue per unit grew 4.6% to $3,028. Strength in building and paper products was responsible for growth in the segment.
Metals and Equipment volume grew 3.0% to 69,000 while revenue jumped 11.2% to $198 mln. Revenue per unit increased 8.0% to $2,870. Volume growth took place due to stronger metals shipments driven by truck conversions to rail and higher demand for construction and pipe.
Fertilizers volume decreased 18.0% to 64,000 while revenue fell 5.1% to $112 mln. Revenue per unit increased 15.7% to $1,750. The decline in volume was due to the closure of a customer facility in late 2017.
Coal volume rose 6.7% to 222,000 while revenue grew 7.4% to $569 mln. Revenue per unit edged up 0.6% to $2,563. Domestic coal volume decreased due to competition from natural gas while export volume increased.
Intermodal volume increased 2.4% to 735,000 while revenue increased 9.4% to $490 mln. Revenue per unit rose 6.9% to $667. Tightening truck capacity fueled growth in domestic volume while international volume was boosted by new customers and strong performance with existing customers.
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