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CSX Q1 Profit Up 22% Despite Service Issues

Higher shipping rates offset slight decline in number of shipments

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PIXABAY
PIXABAY

Despite struggling to keep up with demand the first three months of the year, CSX railroad delivered 22% more profit thanks to higher shipping rates offsetting a slight decline in the number of shipments it handled.

Last week, CSX announced first quarter 2022 net earnings of $859 million, or $0.39 per share, compared to $706 million, or $0.31 per share in the same period last year.

In recent weeks, the Surface Transportation Board has heard from a broad range of stakeholders, including grain elevators and feed mills, about inconsistent and unreliable rail service.

It has also received reports from the Secretary of Agriculture and other stakeholders about the serious impact of these service trends on rail users, particularly with respect to shippers of agricultural and energy products.

The Surface Transportation Board (STB) announced it will hold a public hearing this week on April 26-27 on recent rail service problems and recovery efforts involving several Class I carriers.

STB directed several railways, including CSX Transportation, Inc., to appear.

CSX First Quarter Financial Highlights

  • Revenue reached $3.41 billion for the quarter, increasing 21% year-over-year, as an overall revenue-per-unit increase of 24% more than offset a 2% decline in volume.
  • Operating income of $1.28 billion increased 16% compared to the prior year. Operating ratio increased by 150 basis points to 62.4%, including the impacts of the acquisition of Quality Carriers and higher fuel prices.
  • First quarter operating income included $17 million of expense related to increases in environmental reserves and a $20 million gain from property sales recognized from the 2021 transaction with the Commonwealth of Virginia.
  • Diluted EPS of $0.39 increased 26% from $0.31 for the first quarter of 2021

CSX Corp. is one of the nation’s largest railroads, and it operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces. It recently received approval to add about 1,200 miles of track and three additional states to its network later this year when it acquires Pan-Am Railways in the northeastern United States.

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