Frank Lonegro, chief financial officer of the Class I railway, told investors and analysts at the Bank of America Merrill Lynch Transportation Conference in Boston the company expects volumes to decline in the high single digits in the second quarter.
CSX Corp. is projecting its first full year earnings decline in since the recession, according to Chief Financial Officer Frank Lonegro.
Longero told investors and analysts at the Bank of America Merrill Lynch Transportation Conference in Boston the company expects volumes to decline in the high single digits in the second quarter.
“We are seeing year-to-date volume declines across most of our markets, reflecting continued low global commodity prices, the strong U.S. dollar, and the transition in the energy markets,” he said. “For the second quarter, we now expect high-single digit volume declines, which will negatively impact second quarter earnings.”
The Jacksonville, Fla.-based Class I railway noted in a statement that continued service improvements have allowed CSX to maintain “strong” pricing through the business cycle. Combined with the impact of ongoing network efficiency initiatives, CSX now expects efficiency savings for the full year to exceed $250 million, approaching a company record.
First quarter 2016 profits at CSX Corp. tumbled 19 percent to $356 million compared to the same period a year ago on revenues that dropped 14 percent year-over-year to $2.6 billion. The company attributed the decline in revenues to lower fuel recovery, a $95 million year-over-year drop in other revenues related to payments received in 2015 from customers that did not meet their minimum volumes commitments and a 5 percent year-over-year decrease in volumes.
In terms of its long-term strategy, CSX is aiming to drive earnings growth and margin expansion, and continues to target a mid-60s operating ratio.
CSX cuts full year earnings expectations for 2016
