CSX Income Fell in 1st Quarter 2020

The economic downturn triggered in part by the COVID-19 pandemic led to CSX posting lower earnings for the first quarter of 2020.

The railroad’s operating income fell 3 percent to $1.17 billion and revenue dipped 5 percent to $2.85 billion.

Earnings per share was down 2 percent to $1 but the operating ratio set a first quarter record by improving 0.8 points to 58.7 percent.

Operating ratio is the percentage of revenue that is devoted to expenses.

Traffic for the quarter fell by 1 percent, much of that due to a 15 percent slump in coal shipments.

Merchandise traffic rose 2 percent and intermodal volume held steady.

Although domestic intermodal traffic rose, international intermodal shipments fell due to factory closures in China triggered by the pandemic.

Automotive and fertilizers traffic also posted losses.

CSX declined to provide a projection for its finances for the remainder of the year due to the uncertainty of the course of the pandemic.

However, CSX executives emphasized that the company’s finances remain strong. Nonetheless, CSX will reduce capital spending this year.

It is now expected to be between $1.6 billion to $1.7 billion. CSX plans to install the same amount of new rail this year but increase the amount of ballast that it will lay.

“These are unprecedented times. I’ve been through a lot in my career, from Black Monday to the Great Recession and a lot of other unsettling events. But nothing like this,” said CSX CEO James Foote during a conference call.

Foote said strong companies adapt to changing conditions by altering course and becoming even stronger.

“I am incredibly proud of the men and women of CSX who are working on the front lines,” Foote said. “They have once again shown what outstanding railroaders they are.”

Schedule tightening in the first quarter meant that carload trip-plan compliance fell 1.9 points to 80.7 percent while intermodal rose 0.7 points to 96.2 percent. The comparisons are with the fourth quarter of 2019.

Foote cited improved trip compliance during the first two weeks of April in saying service is currently the best it has ever been.

April traffic was down 20 percent through April 18. The railroad has stored 400 locomotives since the end of March and now has fewer than 2,000 active locomotives.

Three years ago CSX had almost 4,000 active locomotives on its roster.

The carrier has eliminated 50 daily merchandise trains and cut road train starts by 23 percent.

CSX officials said the company will continue to adjust its network as demand dictates and is ready to respond to increased volumes whenever the economy begins to recover.

Such operating metrics as average train speed, terminal dwell time, and car-miles per day set first-quarter records.

Safety metrics improved, compared with the fourth quarter as well as the first quarter of 2019, and officials said they were among the best in CSX history.

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