CSX Moderates Outlook for 2016 Coal Volume Declines

   By Tess Stynes 
 

CSX Corp. (CSX) moderated its 2016 guidance for declines in coal shipments, a major source of revenue for railroad operators, citing an improved outlook for coal exports.

The Jacksonville, Fla., company's shares, up 10% this year, rose 1.8% to $28.63 in recent trading.

CSX and other railroad companies have been hit as weak demand for coal in recent years has contributed to lower freight volume.

At an industry conference on Wednesday, CSX Finance Chief Frank Lonegro said the company now expects coal exports to reach roughly 25 million tons this year, compared with the company's previous estimate of about 20 million tons, citing modest improvements in global markets.

As a result, CSX now expects its 2016 coal market shipments will decline between 20% and 25%, compared with its earlier view for a drop of roughly 25%.

Mr. Lonegro said the company expects its per-share earnings for the third quarter will come in slightly below the 47 cents a share CSX reported for the second quarter. Analysts polled by Thomson Reuters projected per-share earnings of 45 cents.

CSX expects overall freight volume declines at the high end of its previous estimate for a drop in the mid to high single digits on a percentage basis. Mr. Lonegro said CSX expects the lower volume will be partly offset by improving efficiency and higher pricing.

CSX has met or exceeded earnings expectations in recent quarters, having responded to sector turmoil with efficiency moves that included layoffs and the mothballing of trains.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

September 07, 2016 11:44 ET (15:44 GMT)

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