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CSX Corp. reported lower first-quarter income and revenue compared with 2020, officials for the Class I railroad said April 20.
Officials said the extreme cold weather in February and the continuing supply chain disruptions caused by the COVID-19 pandemic impacted the Jacksonville, Fla.-based company’s operation and financial bottom line.
“We faced a challenging environment in the first quarter with winter storms and supply chain disruptions creating headwinds both operationally and commercially,” Chief Financial Officer Kevin Boone said on a conference call with analysts and reporters.
The railroad’s net income was down 8% to $706 million, or 93 cents per share, compared with $770 million, $1, the year before.
Revenue dropped 1% to $2.81 billion from $2.85 billion a year ago.
The company’s price per share figure missed Wall Street expectations. According to the Zacks consensus estimate, analysts were expecting 95 cents per share. However, the company’s revenue estimates beat Wall Street expectations of $2.79 billion.
“I am extremely proud of how our team of railroaders handled the challenges presented by the difficult operating conditions this quarter,” CEO James Foote said.
The CSX quarterly operating ratio (expenses as a percentage of revenue) worsened to 60.9 from 58.7.
Foote said because of the steps the railroad has taken to improve its efficiency and embrace precision scheduled railroading, CSX is positioned for future growth as the U.S. economy improves — as many economists believe it will as the pandemic fades.
With a relentless focus on providing customers with efficient, industry-leading service, $CSX is positioned for growth. Download the $CSX Q1 2021 performance materials at https://t.co/sJsb55YzuC pic.twitter.com/fdjfzZ2DAH— CSX (@CSX) April 20, 2021
“Any way you look at the data, we have dramatically transformed how CSX operates, which has created the capacity to absorb significant growth for years to come,” Foote said. “We remain focused on driving the network back to record performance levels as well as realizing the incremental efficiency benefits this will provide. The opportunities identified during the early stages of the pandemic last year continued to drive sustained efficiency improvements and the more streamlined network is well positioned for growth.”
CSX reported lower revenue in the majority of its business divisions, when measured against first-quarter 2020 numbers.
Chemical shipment income fell by 7% to $580 million from $626 million.
Agriculture and food products declined by 4% to $349 million from $365 million.
Automotive shipment revenue declined by the largest amount in the railroad’s portfolio, dropping 16% to $236 million from $281 million.
Revenue from the transportation of forest products remained essentially flat at $220 million compared with $219 million.
Metals and equipment revenue declined 7% to $186 million from $199 million.
Mineral shipments declined 2% to $125 million from $127 million.
Fertilizer shipments increased 11% to $122 million from $110 million.
Intermodal revenue showed an increase of 11% to $468 million from $422 million.
Coal revenue dipped 5% to $172 million from $181 million.
On a call with analysts and reporters, CSX officials were asked their opinion about the proposed Canadian Pacific merger with Kansas City Southern. On April 20, a rival bid by Canadian National was offered for Kansas City Southern, which is $8.7 billion higher than the Canadian Pacific proposal.
“If it’s good for the customer, if it improves the quality of service for the customer, and it’s in the public interest, I clearly say, hey, let’s take a look at it and figure out what it all means,” Foote said. “But in all circumstances, the devil is in the details of any transaction. And so, until I get an opportunity to review any proposals, I just have to reserve comment on the transactions themselves. I think it’s been a tremendous benefit to the shipping community, what’s taken place to transform the North American rail network.”
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