CSX Lowers 2019 Revenue Forecast

CSX this week modified its 2019 revenue outlook after posting lower than expected revenue and traffic volumes during the second quarter.

CEO James Foote said CSX is taking a cautious approach in an environment of economic uncertainty.

The carrier now expects revenue to fall by 1 to 2 percent this year. Its earlier projections had forecast single-digit revenue growth.

However, CSX still expects to spend up to $1.7 billion on capital projects and to achieve an operating ratio below 60 percent for the year.

During the second quarter, CSX saw its operating income rise by 2 percent to $1.3 billion, as revenue declined 1 percent to $3 billion.

Earnings per share rose 7 percent to $1.08, which was 3 cents below what stock analysts had expected.

At 57.4 percent the operating ratio posted a 1.2-point improvement over the second quarter of 2018. Railroad-related expenses fell by 3 percent.

One factor figuring into the revised projections is loss of crude oil shipments due to a fire at a refinery owned by Philadelphia Energy Solutions.

The refinery, the largest on the East Coast, closed in the aftermath of the fire.

Foote sought to put an optimistic spin on the financial data by saying he was proud of CSX employees for having achieved record levels of efficiency during the quarter while showing significant improvements in safety.

“These results reflect the strength of our operating model, and combined with continued improvements in our best-in-class customer service, represent significant progress toward our goal of being the best run railroad in North America,” he said in a statement.

CSX also touted improvements in its service metrics, saying that intermodal trip-plan compliance was 89.8 percent compared with 62 percent a year ago.

Merchandise trip-plan compliance was 73.3 percent compared with 58.3 percent a year ago.

Train velocity rose by 14 percent while terminal dwell time improved 6 percent. Personal injury rates fell 21 percent while the train accident rate fell 54 percent.

The carrier said improved track inspections resulted in an 85 percent year-to-date reduction in mainline derailments.

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