CSX earnings fall after port business charge
CSX Corp. said Tuesday its fourth quarter net earnings fell to $66 million, from $123 million a year earlier, due to losses on the sale of its international terminal business, CSX World Terminals.
CSX’s international terminals lowered group net earnings by $93 million in the fourth quarter. Excluding this loss, net earnings from continuing operations at CSX rose 42 percent to $159 million in the fourth quarter, up from $112 million.
The big eastern railroad company said CSX World Terminals is now treated as a discontinued operation after its agreement to sell the port business for $1.15 billion to Dubai Ports.
Following the sale, the entire revenue of CSX comes from its surface transportation businesses, comprising rail and intermodal operations. Surface transportation revenue for the quarter was $2.17 billion including $117 million from a 53rd accounting week included in the latest figures. On an adjusted 52-week basis, revenue for the quarter was up 8 percent.
Surface transportation operating income was $315 million, up 32 percent compared to the fourth quarter of 2003. The fourth quarter of 2004 included a $7 million positive impact from an extra week.
Improved rail earnings at CSX contrast with the poorer fourth-quarter results reported by Union Pacific earlier this week.
“CSX’s earnings were driven by the continued strength in the economy and by improving operations,” said Michael J. Ward, CSX chairman, president and chief executive officer. “Notably, this quarter represents the fourth straight quarter in which CSX has delivered consistent, continuous improvement in core earnings.”
CSX’s shares closed up 5.3 percent at $38.96 on the New York Stock Exchange on Tuesday evening.
Commenting on the CSX World Terminals transaction, Ward said, “The company expects to close on this transaction in the first quarter of this year, allowing CSX to even further sharpen its focus on core surface transportation businesses.”
For the year, CSX reported net earnings of $339 million, up from $246 million in 2003. Operating income nearly doubled to $1 billion, from $520 million in 2003. Revenue increased to $8 billion from a restated $7.4 billion in 2003. CSX World Terminals accounted for $226 million of revenue in 2003 and is excluded from the 2004 revenue figures.
