Posts Tagged ‘CSX capital spending’

CSX 1st Quarter Net Income up 2%

April 21, 2017

CSX said on Thursday that its first quarter 2017 net income rose 2 percent to $362 million, or 39 cents per share.

In a news release, CSX said that discounting a $173 million restructuring charge, the adjusted earnings were 51 cents per share.

Those numbers compare with net income of $356 million, or 37 cents per share in the first quarter of 2016.

During the first quarter of this year revenue was up 10 percent to $2.87 billion compared with $2.6 billion in 2016.

CSX attributed the revenue growth to volume growth across most markets, overall core pricing gains and increased fuel recovery.

The railroad believes that its second quarter outlook is favorable because of anticipated growth in most markets, including agriculture and food, export coal, fertilizers, forest products, intermodal and minerals.

The business outlook is neutral outlook for automotive, chemicals, metals and equipment. The domestic coal market has an unfavorable outlook for domestic coal.

CEO E. Hunter Harrison said during a conference call that CSX expects to have an operating ratio in 2017 in the mid-60s, earnings per share growth of around 25 percent off the 2016 reported base of $1.81, and free cash flow before dividends of around $1.5 billion.

The CSX board of directors have approved a $1 billion share repurchase program, which management expects to complete by the end of the first quarter of 2018.

CSX began buying back shares of its stock in April 2015 and has spent $2 billion on that to date.

As for capital spending, CSX now expects to invest $2.1 billion in 2017, including approximately $270 million for Positive Train Control.

More than half of the 2017 capital spending will be used to sustain core infrastructure with the balance allocated to projects supporting profitable growth, efficiency initiatives and service improvements.

CSX trimmed its capital budget for this year by $100 million. Some planned capital projects are being paused as management continues to study its terminal and operating plans.

As expected, CSX plans to continue creating longer passing sidings, particularly in the Chicago-Florida corridor where train lengths are limited by 6,500-foot sidings.

Under the Michael Ward administration, CSX had announced plans to extending or add 27 sidings in that corridor. Harrison expects to move some sidings to create a longer siding elsewhere.

“If we have sidings that are too short for the longer trains, we’re certainly not going to leave those sitting in the ground and not being utilized,” he said. “We’ll pick up one 6,500-foot siding and move it 15 miles down the railroad and put it with another 6,500. We’ve got a 13,000-foot siding.”

Since Harrison took over as CEO last month, CSX has laid off 765 employees – about 3 percent of its workforce – and further announcements are expected of continued cost cutting initiatives.

CSX chopped a record $420 million of expenses in 2016 and expects to top that this year.

Among the expected moves will be consolidating the railroad’s nine divisions. Also likely to be consolidated are the nine dispatching centers CSX now operates.

The streamlining of operations will result in 550 of the railroad’s 4,400 locomotives being removed from service and stored by the end of the summer. CSX has already mothballed another 550 locomotives.  About 25,000 freight cars will be stored.

CSX wants to impose a balance of operations over seven days a week and reduce the average terminal dwell time from 26 hours to somewhere in the high teens.

During the conference call, Harrison suggested that he does not expect any mergers or acquisitions to occur during the four-year life of his contract.

CSX to Step Up Track Expansion in 2017

January 12, 2017

CSX plans to step up its track capacity expansion efforts in 2017.

CSX logo 1The company’s associate vice president—engineering, Tod Echler, told the National Railroad Construction & Maintenance Association convention this week that CSX will add 49 miles of new track in eight states as part of its capacity expansion projects.

He did not provide further details about other 2017 capital spending plans, saying only that track expansion will exceed what the railroad did in 2016.

Among the capital projects for this year is revamping the Howard Street Tunnel in Baltimore, a 1.7-mile single-track bore built in 1895. It will be enlarged to allow double-stack container trains to use it.

That project, for which CSX has yet to land all of the $1.3 billion funding, will take four to five years to complete.

In 2016, CSX added 20 miles of new track in four states and opened the first of its rebuilt Virginia Avenue tunnels. The second of those tunnels is expected to open in 2018, clearing the way for stack trains to operate between Chicago and Portsmouth, Virginia.

NS, CSX Outline 2016 Capital Spending Projects

January 9, 2016

Norfolk Southern and CSX laid out their capital spending plans for 2016 before an industry conference this week.

NS said its capital budget is $1.2 billion and includes installation of positive train control, 448 miles of new rail, 2.4 million new crossties and 2.4 million tons of ballast, $64 million for bridge construction and $15 million for contract bridge repair.

Other projects that NS plans to undertake include $125 million for new and continuing intermodal construction work, $50.7 million for capacity improvement work between Chicago and Conway Yard near Pittsburgh and $45 million for the North Carolina passenger capacity project.

NS also has budgeted work for the Indiana Gateway project, a public-private venture that has received $67 million from the Federal Railroad Administration. The project is seeking to alleviate congestion on the NS Chicago Line east Chicago.

A CSX presentation did not provide specific budgeted amounts, but instead focused on planned projects.
These include lengthening three sidings on the Main Line Subdivision (Louisville, Kentucky, to Nashville, Tennessee) and expanding Casky Yard in Hopkinsville, Kentucky.

CSX also has in the works several projects in the Richmond, Virginia, region plus the ongoing development of the National Gateway project to create double-stack clearance on a route linking Chicago with the East Coast.

Railroad officials said 14 of the 21 National Gateway projects have been finished and six are near completion.  However, the largest project, enlarging a tunnel under Washington, D.C., has just gotten underway.

The Louisville-Nashville route project seeks to make it possible to operate longer trains. Short sidings mean that trains are limited to 6,500 feet.

The Richmond projects include construction of two tracks that will enable trains to bypass Acca Yard.

CSX To Spend $2.5B in 2015 Capital Projects

January 30, 2015

CSX said that it plans to spend $2.5 billion in capital improvement projects in 2015 that it said will result in increased efficiency over its 21,000-mile network.

In particular, CSX will reopen a locomotive service facility in Buffalo, N.Y., and construct an intermodal terminal in Pittsburgh that will be part of the railroad’s National Gateway Project.

As part of the latter, CSX will also launch work on starting the enlargement of the Virginia Avenue Tunnel in Washington D.C., so that double-stacked container trains can use it.

Other highlights of the CSX capital budget for 2015 include:

  • Deployment of about 3 million tons of ballast.
  • Replacement of about 3.2 million crossties.
  • Replacing 500 miles of rail and resurfacing an additional 5,300 miles.
  • Repairing about 200 bridges.
  • The purchase and delivery of 200 General Electric ES44AH locomotives.
  • Rebuilding about 95 locomotives.
  • Rebuilding or purchasing about 3,300 railcars.
  • The purchase of 1,000 new containers.
  • Increasing clearances over 425 new miles to accommodate double-stack container trains..
  • Investing $105 million in technology enhancements.