(Updates with additional sector information.)

 
   DOW JONES NEWSWIRES 
 

CSX Corp.'s (CSX) first-quarter earnings declined 30% as coal volumes dropped and weakness in industrial production, housing and consumer spending lowered volumes.

The freight sector has been under pressure as the economic downturn has hurt demand for nearly all goods, pushing traffic down in nearly every industry linked to freight movement. In response, CSX, the nation's third-largest railroad by revenue, has furloughed employees and idled locomotives.

The weakness in coal volumes came adds to CSX's broader volume woes, as the company had recently counted on coal and grain shipments to keep results strong.

CSX, which operates in 23 Eastern states and the District of Columbia, reported earnings of $246 million, or 62 cents a share, down from $351 million, or 85 cents a share, a year earlier. The prior year's results included a 5-cent gain from an equity earnings adjustment.

Revenue dropped 17% to $2.2 billion amid a 17% decline in volume. In January, the company foresaw a double-digit drop in first-quarter shipping volume, which was also hurt by a drop in volumes in the agriculture and energy sectors.

The revenue drop matched the company's 17% drop in operating expenses, allowing the company to produce operating income of $522 million in the quarter.

Analysts polled by Thomson Reuters expected per-share earnings of 51 cents on revenue of $2.26 billion.

Automobile volume and revenue fell 53%, while agriculture volume was flat. Coal volume, which had buoyed the industry in recent quarters, was down 7%. Intermodal volume was down 13%, and revenue was off 22%, as imports and exports slowed.

The railroad operator indicated earlier this year that it could continue to raise prices because shipping freight by rail remains more cost-effective for companies. Some railroad customers have called on Congress to reinstate tighter industry oversight in response to the industry's pricing hikes.

Standard & Poor's Ratings Service in February said it believed rail companies, including CSX, will perform better than other transportation companies, as they benefit from the diversity of its customers and end markets.

Shares were up 5.8% to $30.04 in after-hours trading. The company's stock has lost over half its value since September.

-By John Kell, Dow Jones Newswires, 201-938-5285, john.kell@dowjones.com

(Doug Cameron contributed to this report.)