CSX railroad nearly doubles 3Q profit as reforms chug ahead

OMAHA, NEB. >> CSX Corp. hauled in nearly double the profits it reported in last year’s third quarter when the railroad was struggling with service problems as it implemented its new operating model.

The Jacksonville, Florida-based company said Tuesday it earned $894 million, or $1.05 per share, in the quarter. That’s up from $459 million, or 51 cents per share, last year.

CSX CEO Jim Foote says the results show the railroad is continuing to become more efficient. Since early last year, CSX has been reforming its operations to handle more volume with fewer locomotives and employees by running trains on a tighter schedule.

The Wall Street analysts surveyed by Zacks Investment Research expected earnings of 94 cents per share.

The railroad’s revenue grew 14 percent to $3.13 billion in the quarter. That also topped the $3.04 billion that the analysts surveyed by Zacks expected.

CSX said its third-quarter expenses declined 2 percent to $1.84 billion even though fuel prices were higher and the railroad delivered 4 percent more carloads of freight.

Edward Jones analyst Dan Sherman said CSX is doing an excellent job of using its assets more efficiently. For instance, the railroad handled more freight this quarter with fewer workers.

Foote said CSX now expects revenue for the full year to be up by 6 percent to 8 percent because of its strong results. Previously, the railroad had predicted revenue would grow by a mid-single-digit rate.

In after-hours trading, the stock added 2.5 percent to $74. CSX shares have climbed 31 percent since the beginning of the year, while the Standard & Poor’s 500 index has climbed 5 percent.

CSX operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces.