CSX (CSX 71.00, -1.20, -1.66%) climbed 1.6% in pre-market after
beating quarterly expectations.
The rail carrier reported above-consensus third quarter earnings of $1.05/share on a 14.1% year/year increase in revenue to $3.13 bln, which was also ahead of market expectations.
Operating ratio improved by 970 basis points to 58.7%, hitting a new record for the third quarter.
The company's strong revenue growth rate was owed to broad-based volume growth, higher fuel recovery, favorable mix, higher supplemental revenue, and gains from pricing. Revenue growth was coupled with a 2% decline in expenses (to $1.84 bln), resulting from efficiency gains. Operating income grew 49% to $1.29 bln.
CSX recorded revenue growth in all but one product category. Fertilizers revenue declined 2% to $104 mln while Fertilizers volume fell 12% to 60,000. Revenue per unit in the same segment increased 11% to $1,733. The decline in Fertilizers revenue was due to a previously-announced customer closure.
Looking at the remaining product categories, Chemicals revenue grew 9% to $596 mln while volume increased 5% to 172,000. Revenue per unit grew 4% to $3,465. The increase was driven by broad-based growth while shipments of fly ash and sand declined.
Agricultural and Food Products revenue increased 13% to $325 mln while volume increased 6% to 112,000. Revenue per unit grew 7% to $2,902. Strength in domestic and export shipments of grain fueled the increase.
Automotive revenue rose 12% to $300 mln while volume increased 6% to 111,000. Revenue per unit grew 6% to $2.703. Strength in North American trucks and SUVs fueled the overall growth.
Minerals revenue increased 14% to $137 mln while volume grew 6% to 85,000. Revenue per unit increased 7% to $1,612. Stronger demand for construction and paving projects supported growth in the segment.
Forest Products revenue spiked 23% to $223 mln while volume jumped 16% to 74,000. Revenue per unit increased 7% to $3,014. Demand for building products and e-commerce driven pulpboard demand fueled growth in this segment.
Metals and Equipment revenue grew 15% to $205 mln while volume rose 8% to 69,000. Revenue per unit increased 7% to $2,971. Demand for construction pipe and conversions from truck to rail fueled the overall growth.
Coal revenue rose 14% to $588 mln while volume increased 7% to 234,000. Revenue per unit increased 7% to $2,513. Strength in export coal was partially offset by lower domestic use of utility coal.
Intermodal revenue rose 12% to $500 mln while volume increased 3% to 739,000. Revenue per unit grew 9.0% to $677. A tight truck supply and strong international demand contributed to the growth.
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