The company announced record operating income of more than $US1 billion ($1.37 billion) for Q2 and a record-low operating ratio of 66.8%, and expects to deliver mid-to-high single digit earnings per share growth for 2015 – although the upper end of that range has become “more challenging” given the current energy environment.
“With low natural gas prices and high inventory levels continuing to reduce utility coal demand, CSX now expects domestic coal volume to decline by approximately 10% for 2015 and the outlook for export coal volume remains approximately 30 million tonnes for the year,” the company’s quarterly said.
“The company also expects meaningful margin expansion as it progresses towards a full-year operating ratio in the mid-60s longer term.”
CSX reported net earnings of $553 million, or a record 56c per share – an increase from $529 million, or 56cps, in Q2 2014.
Revenue declined 6%, as pricing gains were more than offset by the impact of lower fuel recovery, a 1% volume decline and changing business mix.
At the same time, CSX said continued low fuel prices and savings from efficiency initiatives reduced expenses by 9%, resulting in the company delivering record operating income of more than $1 billion for the quarter and a record-low operating ratio of 66.8%.
“While we saw challenges in a number of markets, CSX employees delivered an even safer, more reliable and more differentiated service product this quarter,” CEO Michael Ward said.
“We expect the momentum in network performance we saw in the second quarter to accelerate, continuing to create value for our customers and shareholders.”