CSX WARNS OF LOWER PROFIT RESULTS FOR FOURTH QUARTER
CSX Corp. said that rail congestion and additional costs
related to Sea-Land Service’s international business, sold on Dec. 10, will reduce
earnings for the fourth quarter.
The Richmond, Va.-based transportation group issued a formal profit warning
on Monday concerning its fourth quarter results, due to be announced on Jan. 27.
CSX expects fourth quarter earnings to be "significantly below Wall
Street expectations," it said.
CSX said it currently expects earnings before one-time items for the fourth
quarter to be approximately 18 to 24 cents per share.
This compares with earnings per share of 51 cents in the fourth quarter of
1998, when the company reported net earnings of $108 million.
CSX said that Sea-Land’s operating income for the quarter would be a
breakeven result and that operating income from rail and intermodal activities would be in
the range of $175 million to $195 million for the quarter.
In the same quarter of last year, CSX had reported an operating income of
$247 million from its rail business and $11 million from intermodal activities. Operating
income from container shipping in the fourth quarter of last year was $16 million.
"Congestion problems caused by the assimilation of former Conrail
traffic and residual effects of Hurricane Floyd on the network adversely impacted fourth
quarter results," CSX said.
John W. Snow, CSX chairman and chief executive, noted: "Earnings have
suffered this quarter and throughout the year as we have changed the composition of our
company and implemented the most complex rail merger in history."