CSX’s (NASDAQ: CSX) first-quarter net profit fell 7.7% amid lower revenues and a record operating ratio.
First-quarter 2020 net income was $770 million, or $1 a share, compared with $834 million, or $1.02 a share in the first quarter of 2019, the company said Wednesday.
Meanwhile, CSX’s first-quarter operating ratio was a record 58.7%, compared with 59.5% for the same period a year ago. Operating ratio, a company’s operating expenses as a percentage of revenue, can be an indicator of a company’s financial health. A lower operating ratio implies improved financial performance.
First-quarter revenue decreased 5% to $2.86 billion as gains for merchandise revenue weren’t enough to offset declines for coal and other revenue, according to the company. CSX attributed the revenue and volume decline for coal to lower shipments of utility coal and export coal, while the intermodal volumes were under pressure from extended closures in China because of the COVID-19 pandemic.
CSX said the “other” revenue was primarily due to a favorable contract settlement with a customer in the prior year and lower revenue for demurrage and intermodal storage in the current year.
But first-quarter expenses fell 7% to $1.68 billion on what CSX described as continued efficiency gains. Operating income fell 3% to $1.18 billion.
Meanwhile, train velocity in the first quarter rose 4% to 21.2 mph compared with the first quarter of 2019, while terminal dwell, or the amount of time a train spends at a terminal, fell 3% to 8.3 hours.
“I am extremely proud of our outstanding CSX employees for keeping the railroad running at such a high level during these unprecedented times and enabling the delivery of critical goods across the country,” said Jim Foote, CSX president and chief executive officer. “Their hard work and dedication over the past few weeks, and throughout our transformation, have put CSX on the strongest footing it has ever been heading into this period of economic uncertainty.”