CSX (CSX 57.30, -0.83) has surrendered 1.4% in pre-market after reporting mixed results.
The rail carrier reported above-consensus fourth quarter earnings of $0.64 per share on a 5.7% year-over-year decline in revenue to $2.86 billion, which was just shy of estimates. The company's fourth quarter earnings exclude a $3.60 billion net tax benefit resulting from the Tax Cuts and Jobs Act of 2017 and a $10 million net restructuring charge.
The company's revenue contraction rate was mostly due to the impact of an extra fiscal week during 2016. Operating ratio improved 220 basis points year-over-year to 64.8%. Average train velocity improved to 16.2 mph from 14.0 mph in the previous quarter and 14.2 mph one year ago.
Terminal Car Dwell declined to 10.6 hours from 12.1 hours in the previous quarter and 11.4 hours one year ago.
Looking at revenue by cargo type, automotive revenue fell 10.0% due to lower U.S. vehicle production while agriculture and food products revenue declined 5.0% due to weaker export markets. Metals and equipment revenue declined 3.0%. Conversely, coal revenue grew 4.0% due to beneficial global supply levels and pricing conditions while intermodal revenue also increased 4.0%, thanks to higher port volumes and a strong peak season. Chemicals revenue grew 3.0% thanks to stable core markets.
Going forward, CSX expects that revenue for fiscal year 2018 will show a slight year-over-year increase while operating ratio is expected to show continued improvement. The company expects that capital expenses will be roughly $1.60 billion. The company will present its long-term outlook at an investor conference that will be held in New York City on March 1.