CSX’s fourth quarter profit slipped 13%, but the railroad hauled slightly more freight and kept its trains running smoothly.
The Jacksonville, Florida-based railroad said it earned $886 million, or 45 cents per share, during the quarter. That’s down from $1.02 billion, or 49 cents per share, a year earlier.
The results for the latest quarter were in line with the average of analysts surveyed by FactSet Research.
The volume of shipments the railroad delivered rose 1% even with all the uncertainty in the economy, while it posted the best service performance in the industry. CSX said its trains were moving an average of 18.3 mph during the quarter, up from 17.5 mph a year earlier, and they spent less time sitting in railyards — only 9.6 hours on average.
CSX CEO Joe Hinrichs said that he’s feeling pretty good about demand in several key sectors heading into this year. Chemical and intermodal shipments are showing signs of life while autos, coal and mineral shipments remain strong, he said. And now that CSX’s workforce has stabilized at a healthy level he plans to focus on getting more efficient while continuing to improve service and safety.
The railroad doesn’t plan big changes this year. Instead, Hinrichs said they’ll focus on improvements such as finding ways to park additional locomotives by lengthening trains and reducing the number of them. CSX will also try to reduce the number of times it has to move cars between trains.
“There are ways we can we can do things more efficiently without sacrificing safety and service — in fact even increasing it. And that’s one of the things I’m encouraged by,” Hinrichs said.
CSX predicted that volume and revenue will both be up by the low to mid single digits this year, and the railroad should be solidly profitable thanks to strong pricing, improving efficiency and lower inflation.
“We’ve reached a threshold on customer service that has been recognized in the industry, and now you’re seeing the opportunity for us to to take advantage of that stability to get more efficient,” Hinrichs said.
Edward Jones analyst Jeff Windau said in a research note that CSX has a reputation for being very efficient, and he expects the railroads mangers to remain focused on that — just like Hinrichs said.
CSX said it’s quarterly revenue declined 1% to $3.68 billion. That was above the $3.63 billion that analysts predicted.
CSX’s expenses crept up 4% to $2.36 billion during the quarter.
The railroad’s earnings report came just over a week before the one-year anniversary of the fiery Norfolk Southern derailment in East Palestine, Ohio, that prompted Congress and regulators to call for reforms. The industry added hundreds more trackside detectors to help spot problems before they can cause derailments and shared information industrywide about how to use the data from those detectors.
But Hinrichs said he still expects Congress to pass a rail safety bill later this year, but the railroads are trying to shape what’s included in the final bill.
“We’re just we’re continuing to focus Congress on making sure it’s focused on safety and improving safety. And, focused on facts. You know, what the NTSB is telling us, and focused on real safety initiatives and not other people’s agendas,” he said.
CSX is one of the nation’s largest railroads, operating trains on more than 20,000 miles (32,000 kilometers) of track in 23 Eastern states and two Canadian provinces.