CSX updates third-quarter and full-year 2015 expectations

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Written by: William C. Vantuono, Editor-in-Chief
CSX Chief Sales and Marketing Officer Fredrik Eliasson, formerly the company’s CFO, on Sept. 9, 2015 reviewed performance to date and updated investors on the company’s third quarter and full-year expectations at the Cowen and Company 8th Annual Global Transportation Conference in Boston, Mass.

CSX “delivered strong financial, service and efficiency improvements in the first six months of 2015, but expects the second half of the year to be more challenging given intensifying headwinds in its coal markets,” Eliasson said. “In the third quarter, we see strong pricing that reflects the value of our service, and we continue to drive greater asset utilization and reduce costs as we match our resources with demand while improving our service product. At the same time, overall volume to date is down about 2%, with both our domestic coal and merchandise markets tracking slightly below our original third-quarter expectations.

“While we continue to target flat earnings per share for the third quarter, achieving that estimate will be more challenging given the weaker than expected volumes. In addition, with the volume declines this quarter and ongoing challenges to coal that are expected to continue in the fourth quarter, CSX now expects full-year earnings per share growth in the mid-single digits.”

Eliasson noted that earnings growth “will be delivered despite domestic coal revenue declines that may exceed $400 million for the year. As CSX continues to focus on its value drivers of growing merchandise and intermodal business, value pricing and efficiency savings, we still expect to drive meaningful full-year margin expansion this year as we progress toward our longer term goal of a mid-60s operating ratio.”

Eliasson was elevated to Chief Sales and Marketing Officer at CSX as part of several senior management promotions that resulted from President and COO Oscar Munoz resigning to become head of United Airlines.

The Cowen and Company Annual Global Transportation Conference is run by Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl.

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