CSX 1Q profit dips 8pc but railroad sees economy growing

OMAHA, NEBRASKA (AP) — CSX Corp said its first-quarter profit declined eight per cent due to higher expenses, but the railroad said it expects to benefit as the United States (US) economy strengthens further over the rest of the year.

The Jacksonville, Florida-based company said on Tuesday that it earned USD706 million, or 93 cents per share, during the quarter. That’s down from USD770 million, of USD1 per share, a year ago.

The results fell short of Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 95 cents per share.

CSX reiterated that it expects volume to grow this year at a faster pace than the US economy, which is the midst of a recovery from the impact of the coronavirus pandemic. The railroad also said it expects revenue to grow by a rate in the low double digits this year because its customers are shipping more.

“We entered this year cautiously optimistic about the potential for an improving economic environment. And I am pleased to see momentum steadily building over the last few months,” CEO Jim Foote said. “It’s nice to finally have an economic tailwind at our backs.”

Foote said there is less uncertainty about the economy now than there was at the start of the year, and the railroad’s customers are saying they expect the second half of 2021 will be stronger.

A CSX freight train passes through Homestead, Pennsylvania. PHOTO: AP