CSX Operating Income Up 8% in 2022

CSX said this week that for 2022, its operating income was $6 billion an increase of 8 percent compared with 2021,

This included $144 million in gains from what management described as “property sales recognized from the 2021 agreement with the Commonwealth of Virginia.”

Full-year 2021 operating income included $349 million in gains from this same transaction, CSX said in a news release.

Net earnings for 2022 were $4.17 billion, or $1.95 per share, compared to $3.78 billion, or $1.68 per share, in 2021. Revenue reached $14.9 billion for 2022, increasing 19 percent compared with 2021.

The operating ratio was 59.5 percent while diluted earnings per share were $1.95, an increase of 16 percent from $1.68 for the full year 2021.

During the fourth quarter of 2022, CSX posted operating income of $1.46 billion compared to $1.37 billion in the same period of 2021.

Net earnings were $1.02 billion, or $0.49 per share, compared to $934 million, or $0.42 per share in the same period of 2021.

Other fourth quarter highlights included revenue of $3.73 billion, a 9 percent year-over-year, increase that officials said was driven by “higher fuel surcharge, pricing gains, and an increase in storage and other revenues.”

Severe winter weather in late December modestly reduced volumes and revenue for the quarter.

The diluted earnings per share of $0.49 increased 17 percent from $0.42 for the fourth quarter of 2021.

During an investors call on Wednesday, CSX executives said the strong fourth earnings occurred despite signs of an economic downtown.

CSX management expected to gain traffic volume this year thanks to ongoing service improvements.

CEO Joseph Hinrichs said service metrics continued to show improvement through the fourth quarter after starting a clear upward trend in the early fall.

“As we anticipated, our hiring successes have allowed us to deliver better customer service that will allow us to capture more business with more volume over time,” Hinrichs said.

He noted that this has meant on-time performance has reached pre-COVID-19 pandemic levels. For the quarter, intermodal trip plan compliance was 94 percent, while merchandise traffic reached 77 percent, a 20-point improvement compared to the third quarter of 2022.

During the earnings call, CSX management said it was unable to meet shipper demand in 2022 due to service problems related to crew shortages.

CSX executives said merchandise and coal volume continues to grow, which they expect will enable the Jacksonville-based Class 1 railroad to achieve faster business growth than the economy this year.

Hinrichs said CSX is still not meeting the demand that it has to move carload freight.

However, intermodal traffic is expected to decline due to a decline in import activity as retailers work down high inventories they amassed earlier.

CSX management declined to release earnings projections for 2023, citing economic uncertainty. Management also declined to set an operating-ratio goal.

Chief Operating Officer Jamie Boychuk said operations should continue to improve as additional conductors complete training.

CSX is still hiring conductors due to attrition and a low retention rate for new conductors.

“We’re looking at continuing to build our numbers up so we can get to a point where we can cover vacation time and make sure that our employees get time off,” Boychuk said. Consequently, CSX management said it won’t furlough train crews if traffic volume slows.

CSX plans to $2.13 billion on capital projects this year, up from $1.79 billion in 2022.

CSX Earnings, Income up in 2nd Quarter

CSX on Thursday reported higher operating revenue and net income in the second quarter of 2022. This came despite lingering operating personnel shortages that had led the railroad to turn away business.

In a news release, CSX said net income rose to $1.178 billion, or 54 cents per share, compared to $1.173 billion, or 52 cents per share in the second quarter of 2021.

Operating income was up 1 percent to $1.7 billion while revenue rose 28 percent to $3.82 billion.

CSX attributed the increases in nearly all markets to pricing gains, fuel surcharges and the addition of Quality Carriers, a North American provider of bulk liquid chemicals truck transportation.

The operating ratio – the percentage of revenue devoted to expenses – was up to 55.4 percent. In the second quarter of 2021 the operating ratio had been 43.4 percent.

The carrier said the increase reflected the effects of lower real estate gains, the acquisition of Quality Carriers and higher fuel prices.

The carrier said its second quarter 2022 financial results included $18 million of expense related to the acquisition of Pan Am Railways and a $122 million gain (4 cents per share after taxes) from property sales recognized from the 2021 agreement with Virginia.

Second-quarter 2021 results included a $349 million gain (12 cents per share after tax) from the same agreement.

Freight volumes reached 1,594,000, which was nearly the same as the second quarter 2021 volume of 1,59,000.

The carrier said it is still targeting full-year double-digit revenue and operating income growth for the year.

Coal traffic grew 58.2 percent in the second quarter, but CSX management expects that commodity may decline due to market conditions.

Automotive carload growth was 10.4 percent with CSX management anticipating further growth this year due to the alleviation of a semiconductor shortage that has hindered auto manufacturing in recent months.

CSX managers also expect velocity improvements will result in volume growth in intermodal, boxcar and coal traffic over the second half of the year.

Velocity improved in the second quarter with 83 percent of planned work completed on schedule. Intermodal trip plan compliance was 90 percent while carload on-time performance fell 10 points to 59 percent.

Industry analysts said that the key to second half growth lies in how well CSX is able to resolve its worker shortage issues.

Those issues received considerable attention during the second quarter earnings call with CSX executives saying they are looking to increase the number of train and engine workers to 7,000 by the end of September.

But to reach that goal CSX will need to overcome high attribution in the T&E ranks.

“Our ability to hire and retain new workers, which is vital to improving our service and growing the business, remains challenged,” CSX CEO James Foote said during the earnings call.

He said CSX is not alone in having this issue because the labor market is tight and the COVID-19 pandemic “has had a profound effect on employees’ work and lifestyle preferences. Our hiring process has been steady, but slow.”

CSX has 6,667 active T&E workers but Foote indicated that new hires and veteran locomotive engineers and conductors are leaving CSX at significantly higher rates than usual.

The company added 311 conductors during the second quarter but crew availability of late has been lower than usual due to rising COVID-19 infections and workers taking vacations.

The railroad said it has had to respond by making “tough decisions” about what traffic moves and what gets held.

Priority is given to service-sensitive intermodal traffic and in instances where crew availability is tight preference is being given to bulk traffic over merchandise trains because the bulk commodities involve grain or coal being added to large stockpiles.

That was particularly the case in the Southeast where CSX gave priority to grain used as chicken feed. The result was that merchandise freight sustained delays of 24 hours or more.

Foote said CSX is hiring at a faster pace than attrition and he expects to turn the corner on crew availability.

CSX Net Earnings Up 21% in 1st Quarter

CSX said on Wednesday its net earnings in the first quarter rose 21 percent in diluted earnings per share.

Those net earnings were $859 million, or $0.39 per share, compared to $706 million, or $0.31 per share, in the first quarter of 2021.

Operating income was up 16 percent to $1.28 billion compared to $1.10 billion in the same quarter of 2021.

Revenue reached $3.41 billion for the quarter, increasing 21 percent year-over-year, as an overall revenue-per-unit increase of 24 percent more than offset a 2 percent decline in volume.

CSX said that first quarter operating income included $17 million of expenses related to increases in environmental reserves and a $20 million gain from property sales with the Commonwealth of Virginia.

The operating ratio increased from 60.9 percent in the prior-year period by 150 basis points to 62.4 percent.

The company attributed revenue gains in eight of its 10 traffic categories to “strong pricing and higher fuel surcharge.”

Chemicals were up 16 percent; Agricultural & Food Products increased 11 percent; Forest Products increased 4 percent as higher revenue per unit more than offset lower shipments, primarily of building products; Automotive decreased 4 percent; Metals and quipment increased 6 percent; Minerals increased 15 percent; Fertilizers decreased 2 percent; Intermodal increased 13 percent; Coal increased 39 percent; and other revenue increased 41 percent.

During the first quarter the CSX train and engine workforce averaged 6,629 workers compared to 6,432 in the first quarter of 2021. CSX had an average of 561 conductors in training.

Intermodal trip plan compliance was 87 percent, a two-point improvement, but carload trip compliance was just 64 percent, a three-point decline.

“We are pleased with our results this quarter, though we’re not yet satisfied with our service performance,” Foote said during the earnings call with investors.

He said operations showed improvements in March and those trends have continued into April.

However, Jamie Boychuk, CSX executive vice president of operations, said it was too early to say the railroad has reached the bottom of the crew shortage problem.

Nonetheless, he said CSX expects its train and engine ranks to reach full strength by summer.

Crew shortages meant that CSX could not handle all of the traffic it sought during the quarter.

Average train speed was down 15 percent compared to the first quarter of 2021, while terminal dwell time rose 4 percent.

On-time train originations dropped to 65 percent from 79 percent a year ago, while on-time train arrival declined 12 points to 57 percent.

CSX Reports 4th Quarter 2021 Financial Results

CSX said on Thursday that its net earnings in the fourth quarter of 2021 were $934 million, which works out to 42 cents per share.

This was a 22 percent rise over the same quarter in 2020 of $760 million or 33 cents per share.

Revenue for the fourth quarter of 2021 was $3.427 billion, up 21 percent from $2.825 billion in fourth-quarter 2020.

Operating income was $1.366 billion, a gain of 12 percent over the $1.215 billion posted in the same period in 2020. The operating ratio was 60.1 percent, a 310 bps increase over the 2020 period’s 57.0 percent.

In a statement, CSX officials said growth occurred across all major lines of business. increases in other revenue, and the inclusion of financial results for the Quality Carriers program.

Leading traffic growth during the quarter were coal, up 39 percent, and intermodal, up 16 percent.

CSX expects continued traffic volume growth this year that’s “driven by economic expansion and supply chain recovery.”

The company expects to spend $2 billion this year on capital projects. That is an increase of $200 million over last year.

Much of the capital will be spent on adding siding capacity to former Louisville & Nashville lines, where CSX has experienced strong traffic growth.

During the quarterly earnings call, CSX CEO James Foote acknowledged that although profits and revenue rose, crew shortages kept CSX from moving even more freight.

A presentation for investors noted that CSX doubled the number of conductor trainees in the fourth quarter and moved 150 trainees into active service.

Jamie Boychuk, CSX’s executive vice president of operations, said the railroad expects to have 350 new conductors on the job by the end of the third month of this year.

The railroad continues to seek to hire additional operating personnel, he said.

The crew shortage issue has been exacerbated by high levels of workers who have had to quarantine after exposure to or contraction of the COVID-19 virus.

Compliance with trip plans in the fourth quarter dipped to 71 percent for carload traffic but intermodal trip plan compliance improved to 88 percent.

On time train departures fell 13 percent to 72 percent and on-time train arrivals slipped to 65 percent.

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CSX Net Earnings Down in 4th Quarter

CSX reported this week that it had fourth quarter 2020 net earnings of $760 million or 99 cents per share, compared with $771 million or 99 cents per share in the same quarter in 2019.

For the last quarter of 2020, net income included a $48 million charge or 5 cents per share after taxes that was related to debt retirement.

Revenue during the quarter decreased 2 percent compared with the previous year to $2.83 billion.

In a news release CSX said intermodal growth was more than offset by lower fuel surcharge revenue and declines in coal traffic.

Expenses fell 7 percent in a year-over-year comparison to $1.61 billion, driven by fuel expenses and efficiency gains.

Operating income rose 5 percent to $1.22 billion from $1.15 billion compared with the fourth quarter of 2019.

CSX reported a fourth quarter operating ratio of 57 percent, which official said was a fourth quarter record.

In the fourth quarter of 2019 the operating ratio, which measures expenses as a percentage of revenue, was 60 percent.

CSX management expects traffic volume in 2021 to outpace gross domestic product growth, with merchandise volume growth exceeding industrial production.

Management expects intermodal volume to grown faster than merchandise and coal traffic to show some improvement over its 2020 levels.

The carrier is expected capital expenditures of $1.7 billion to $1.8 billion this year.

CSX Lost 20% of its Traffic in Second Quarter

CSX posted a decline of 20 percent in traffic volume during the second quarter of 2020 as the COVID-19 pandemic took hold accompanied by an economic recession.

It was the largest quarterly decline in company history and twice as severe as what it experienced during the Great Recession of 2008.

Operating income fell 37 percent to $828 million while revenue tumbled 26 percent to $2.25 billion. Earnings per share fell 40 percent to 65 cents.

Despite cutting costs by 19 percent, CSX saw its operating ratio rise 5.9 points, to 63.3 percent .

Operating ratio is the percentage of revenue devoted to expenses.

All traffic categories fell with coal volume plunging 44 percent, merchandise traffic off 22 percent and intermodal sinking 11 percent.

There was a bit of good news, though. Traffic has risen about 25 percent since the low point of the pandemic in May.

“Wow. Where do I start in talking about this quarter?” said CSX CEO James Foote during an earnings call.

“This was the most disruptive quarter I have experienced in my career, with both the fastest decline in volumes followed by one of the most rapid increases in volumes in the company’s history,” he said.

Foote expressed pleasure, through, at seeing traffic rebound from its May nadir, which he attributed to a strengthening economy marked by the reopening of North American auto assembly plants and their accompanying finished vehicle traffic.

Although Foote said the trends are encouraging, he said it’s still too early to predict the direction of the economic recovery due to lingering uncertainty over the durability of the economic rebound and the potential impact of the COVID-19 pandemic’s spread.

CSX said carload trip plan performance was 80.5 percent, a decline from the first quarter of 6.1 points above the second quarter a year ago.

Intermodal trip plan performance was 94 percent, down 2.2 points from the first quarter but up from 89.9 percent a year ago.

Most of the falloff in trip plan compliance came in in June as volume began rebuilding and there were delays in recalling furloughed employees.

CSX dropped road train starts in line with the steep volume declines that began in March. But in April the railroad began moving its tonnage on fewer but longer trains, which cut train starts more deeply than the volume decline.

Train starts came within 7 percent of pre-pandemic levels but road train starts remained 17 percent below March levels.

Jamie Boychuk, executive vice president of operations, indicated that fewer train starts are likely to be permanent.

“We are mixing the auto network with our manifest and in some areas with our intermodal network,” he said. “And reducing those train starts … is going to be a good lasting effect as we move forward.”

The CSX workforce, although regaining numbers was 12 percent lower in the second quarter than it was in the same period in 2019.

The railroad has recalled hundreds of train and engine employees from furlough.

Mark Wallace, executive vice president of sales and marketing, said domestic intermodal volume began snapping back in June as retailers restocked store shelves and e-commerce sales were strong.

With some canceled sailing from Asia and elsewhere being reinstated, the outlook for international intermodal has also improved.

Wallace said the future of carload traffic hinges on the recovery of the industrial economy, which is reviving more slowly. He said coal volumes will continue to be challenged.

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.

CSX Net Earnings, Revenue Down in 4th Quarter 2019

Cost cutting can only take a company so far. That is one takeaway from the CSX announcement this week that its net earnings and revenue declined in the fourth quarter of 2019 due to a 7 percent drop in freight traffic volumes.

Net earnings fell 9 percent to $771 million, or 99 cents per share, from $843 million, or $1.01 per share in the fourth quarter of 2018.

Revenue fell 8 percent to $2.9 billion from $3.1 billion. CSX said in a news release that one bright spot was that fourth-quarter expenses were down 9 percent year over year to $1.73 billion due to efficiency gains and volume-related savings.

Operating income declined 8 percent to $1.15 billion compared to the fourth quarter of 2018.

The Class 1 carrier said the lower volumes were in part driven by loss of coal traffic.

CSX did post a 60 percent operating ratio, a fourth quarter record. The operating ratio is the percentage of revenue that is devoted to expenses.

In the fourth quarter of 2018 the operating ratio had been 60.3 percent.

For 2019 as a whole, CSX generated net earnings of $3.33 billion, or $4.17 per share, versus 3.31 billion, or $3.84 per share, in 2018, an increase of 1 percent and 9 percent, respectively.

It said its full-year 2019 operating ratio of 58.4 percent set a U.S. Class I record, improving from the 2018 record result of 60.3 percent.

For the year, CSX traffic volume was down 4 percent with merchandise traffic flat, coal traffic down 5 percent, and intermodal falling by 8 percent.

CSX said much of the 17 percent decline in coal traffic in the fourth quarter of 2019 was due to fewer shipments of coal used to generate electricity. That market has been hindered by competition from natural gas.

Export coal fell due to reduced international shipments of both thermal and metallurgical coal as global benchmark prices fell.

Also falling was domestic and international intermodal shipments. CSX attributed that 7 percent decline to the closing of some low-density service lanes.

As far as the 3 percent falloff in merchandise traffic, CSX said chemicals were down due to reduced natural gas liquids, fly ash and sand shipments.

Agriculture and food products increased due to gains in ethanol, sweeteners and oil.

Automotive traffic fell due to a reduction in North American production while minerals increased due to higher shipments for highway projects.

Forest products dipped due to fewer pulp board shipments while fertilizer volume gained on short-haul phosphate shipments that offset by declines in long-haul fertilizer shipments.

Metals and equipment were down due to reduced steel, construction and scrap shipments.

In a conference call, CSX CEO James Foote sought to put a positive spin on the report by saying, “our service is the best it’s ever been and getting better.”

Mark Wallace, CSX’s executive vice president of sale and marketing, insisted that the railroad is gaining market share every day from trucks as a result.

Nonetheless, he said CSX does not foresee a contraction in trucking industry capacity that would spark an increase in truck rates that could prompt diversion of highway loads to intermodal.

Wallace also said CSX will hold the line on intermodal rates and refuse to chase volume to cutting price.

He said most of CSX’s domestic intermodal business is under long-term contracts.

In speaking to investors, Foote said traffic was hindered by a strike against General Motors last summer and the closing an oil refinery in Philadelphia following an explosion and fire.

“These are truly great results considering the industrial economy’s second half performance,” Foote said.

CSX management expects freight volume to continue to lag over the next few months due to a lackluster industrial economy.

There is a reduced global demand for thermal and metallurgical coal and low natural gas prices will depress domestic demand for coal.

The railroad’s management team said it expects to post growth numbers in 2020 in intermodal and merchandise traffic, but those will enable the carrier to overcome an expected continued decline in coal traffic.

For the year ahead, CSX is projecting revenue to fall by 2 percent compared to 2019. It has an objective of an operating ratio of 59 percent.

Capital expenses are expected to range between $1.6 billion and $1.7 billion, which would be similar to what has spent in recent years.

Foote said the improvements in service quality have enabled CSX to offer service to shippers that is “truck-like in consistency.”

If CSX is to compete against truckers is must offer a reliable service. He also played up his contention that CSX is less expensive than service and more friendly to the environment due to better fuel efficiency.

Jamie Boychuk, executive vice president of operations, said improvements in velocity have enabled the carrier to tighten some of its train schedules, which might negatively affect on-time performance in the first quarter.

CSX said its train velocity has improved by 12 percent with terminal dwell down 9 percent and car miles per day up 6 percent.

During the fourth quarter, trip plan compliance was 82.6 percent for carload traffic and 95.5 percent for intermodal shipments.

The same figures for the fourth quarter of 2018 were 67.3 percent and 73.4 percent respectively.

CSX said 92 percent of its trains departed on time and 85 percent arrived on time.

Those are improvements of 18 percent and 15 percent respectively from the fourth quarter of 2018.

During the 2019 the personal injury rate for CSX employees fell by 15 percent while the train accident rate improved by 41 percent.

Despite falling traffic volume and revenue, Railway Age described CSX’s fourth quarter results as solid because the earnings per share performance exceeded that projected by Wall Street stock analysts.

“However, weak 2020 guidance and top-line outlook were the larger story, with 2020 revenue to be adversely affected by lower coal volumes and yields,” wrote Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl.

Seidl said his firm has lowered its 2020 and 2021 earnings per share estimates for CSX.

CSX reported earnings per share of 99 cents for the fourth quarter, which beat the 96 cents per share expected on Wall Street.

Analysts had projected CSX would have operating income of $1.18 billion while the actual figure was $1.15 billion. Revenue at  $2.89 billion was slightly below the projected $2.91 billion.

The diminishing coal market is important, Seidl noted, because it is a high-margin business. CSX management expects to lose $300 million coal revenue this year.

Cowen is projecting that 2020 and 2021 earnings per share estimates for CSX will be $4.10 and $4.50 to account for CSX management’s new outlook. The projections had been $4.40 and $4.75, respectively.

CSX Sees Success in Winning Traffic From Trucks

Amid a steady stream of gloomy news and prognostications about falling railroad freight volumes, CSX CEO James Foote said this week that his carrier is starting to see some success in winning back business from truckers.

Speaking at the Baird 2019 Global Industrial Conference, Foote said CSX is starting to reverse the loss of business to highways.

“Our customers are coming to us, in many instances, and saying how can we ship more by rail?” Foote said.

He said improved service and lower rates than truck will help CSX regain market share.

“What it boils down to is running a really, really good railroad,” Foote said.

Foote said CSX’s merchandise volumes are outperforming the rest of the industry, which he said is a sign that the railroad has regained traffic from truckers.

Through Sept. 30 CSX merchandise traffic was up 1 percent while eastern rival Norfolk Southern has seen its merchandise volume fall 3 during the same period.

Foote expects CSX to post gains next year in domestic intermodal volumes but coal traffic whether for domestic use or exports, will remain challenged due to lower-priced natural gas and less global demand for metallurgical coal.

Foote said trip plan compliance for intermodal traffic has of late been in the 95 percent range while carload freight compliance has been 82.5 percent.

Noting that railroads have been losing market share of merchandise traffic to trucks for decades, Foote said that was because truckers provided better service while railroad service was poor.

“There is a tremendous amount of opportunity for us to grow our merchandise franchise, just tremendous,” Foote said.

Currently, railroads have an 8 percent share of the transportation business in North America.

Foote was reluctant to say if merchandise traffic at CSX could grow as fast as the overall economy or at least faster than the rate of industrial production because there is too much economic uncertainty, global trade tensions, and a slowing industrial economy.

An audience member asked Foote about CSX’s operating ratio, which was 56.8 percent in the third quarter and if it would remain in the mid-50s.

In response Foote said the OR is a measure of how well a railroad is growing revenue and controlling costs and he said he didn’t know if an OR of 56 percent or even 60 percent would enable CSX to produce consistent earnings growth year after year.

“It’s not a quest to get as low as you want it to be,” Foote said. “If somebody was going to give me an award for giving you a 55, I could probably get to a 55 tomorrow. But you’d have to chop off a whole bunch of business to do it, and that’s not what we’re here to do.”

CSX Revenue, Traffic Fell in 3rd Quarter

As expected, the third quarter profits of CSX fell due to flat operating income and falling revenue.

The carrier said on Wednesday that declines in intermodal and coal revenue  traffic drove the declines.

CSX reported operating income  of  $1.28 billion and a 5 percent decline in revenue to $2.97 billion.

Net income fell 4 percent to $856 million by earnings per share grew 3 percent to $1.08.

The operating ratio set a record by improving 1.9 points to 56.8 percent.

“I am extremely proud of our dedicated team of CSX railroaders for once again setting new records for operating efficiency, customer service, and safety this quarter,” CSX CEO James Foote said in a statement.

“These results reflect our continued commitment toward being the best run railroad in North America and providing our customers with best-in-class service.”

Merchandise revenue was flat while coal and intermodal combined were down 9 percent. Overall, traffic volume fell 5 percent in the quarter compared to the third quarter of 2018.

Carload trip plan compliance rose to 74.6 percent compared to 66.1 percent last year. Intermodal trip plan compliance was 94.2 percent compared to 79.8 percent in the third quarter of 2018.

Cars spent more time in yards but trains moved faster. The average terminal dwell was up 3 percent while average train speed was up 13 percent.

CSX operated an average of 87 trains per day with distributed power, up from just a dozen in the third quarter of 2018. This enabled CSX to post a 5 percent gain in fuel efficiency.

The personal injury rate dropped by 5 percent while the train accident rate plunged was down by 51 percent, a company record.

CSX also set a record for the fewest number of train accidents in a quarter.

CSX expects that when 2019 is over it will have seen a  revenue decline of 1 percent to 2 percent  but will have posted a sub-60 percent operating ratio and capital spending of between $1.6 billion and $1.7 billion.