CSX Profit Rises 15% on Strong Demand

By Tess Stynes 

CSX Corp. said its fourth-quarter earnings rose 15% as the freight railroad operator continued to benefit from strong freight demand.

The Jacksonville, Fla., company is the first big U.S. railroad to report results for the latest quarter. Analysts have been expecting nearly all freight-rail companies to post strong results despite a steep decline in prices for crude oil--one of the fasting growing parts of the rail business.

Booming shale production has led to a surge in crude shipped by rail, which has increased demand but also snarled railroad traffic and raised questions about how to improve safety.

Looking ahead, along with new pipelines coming online, crude-rail shipments may face increased competition from truckers as falling fuel prices diminish the price advantage of trains over trucks.

Overall, CSX reported a profit of $491 million, or 49 cents a share, up from $426 million, or 42 cents a share, a year earlier. Revenue increased 5.3% to $3.19 billion.

Analysts polled by Thomson Reuters expected per-share profit of 49 cents and revenue of $3.18 billion.

Total shipment volume grew 6.1% and average revenue per unit improved by 5.35.

Coal volume, increased 11% led by 22% growth in shipments of coal used by domestic utilities replenishing stockpiles and market gain.

Intermodal shipments, which involve the movement of freight by several modes of transportation, rose 5% led by growth in domestic volume.

Total merchandise volume, which includes agricultural, industrial and housing and construction shipments, increased 5.2%.

CSX affirmed its 2015 financial projections for double-digit earnings growth and stronger margins.

Union Pacific Corp., Kansas City Southern and Norfolk Southern Corp. plan to release their fourth-quarter results in coming weeks.

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