Despite a drop in profit in the second quarter, CSX’s (NYSE: CSX) operating ratio set a company record.
CSX said its operating ratio was 57.4 percent for the second quarter of 2019, setting a company record for the lowest second quarter operating ratio. In contrast, operating ratio for the second quarter of 2018 was 58.6 percent. Operating ratio, which can be a factor in determining a railroad’s profitability, is a ratio that looks at a company’s operating expenses as a percentage of its revenue.
While the railroad’s operating ratio improved, its quarterly profit fell. CSX’s second quarter profit was $870 million, or $1.08 per share, compared with $877 million, or $1.01 per share in the second quarter of 2018.
Second quarter revenue fell by 1 percent to $3.06 billion, with growth in CSX’s merchandise segment unable to offset weakness in CSX’s intermodal segment. However, CSX’s operating expenses were down 3 percent to $1.76 billion, and that helped CSX’s operating income to grow by 2 percent to $1.31 billion in the second quarter of 2019 compared with $1.28 billion for the same period in 2018.
CSX’s merchandise commodities include forest products, agricultural products and automotive products.
Meanwhile, service metrics improved in the second quarter, with average train velocity rising 14 percent to 20 miles per hour and average dwell time falling 6 percent to 9.1 hours. CSX defines dwell time as the average amount of time in hours between car arrival to and departure from the yard.
“I am extremely proud of our dedicated CSX employees for once again achieving new record levels of efficiency this quarter, while also driving a significant improvement in safety,” said CSX chief executive officer Jim Foote. “These results reflect the strength of our operating model, and combined with continued improvements in our best-in-class customer service, represent significant progress toward our goal of being the best run railroad in North America.”