A decline in operating revenues put pressure on CSX’s net profit for the third quarter of 2023.
Net earnings for the eastern U.S. Class I railroad were $1.3 billion, or 42 cents per diluted share, for the third quarter of 2023, compared with $1.1 billion, or 52 cents per diluted share, for the third quarter of 2022.
Revenue totaled $3.57 billion in the third quarter, down 8% year-over-year (y/y). Lower fuel prices, reduced intermodal storage revenue, a decline in export coal benchmark prices and a decrease in export coal benchmark prices contributed to declining revenues and more than offset higher merchandise yields and coal volume growth, CSX said.
But expenses fell 2% to $2.28 billion on lower fuel expenses and lower costs for equipment and rents.
Operating income was $1.3 billion, down 18% y/y, while operating ratio (OR) — a metric that investors sometimes use to gauge the financial health of a company — rose to 63.8% from 59.5%. A lower OR implies improved financial health. CSX (NASDAQ: CSX) said these figures account for “negative impacts of approximately $350 million related to net fuel, storage revenue, and coal prices, partially offset by the favorable impact of $42 million due to out-of-period labor and fringe expenses incurred in the prior year.”
In a Thursday afternoon release, CSX President and CEO Jim Hinrichs said: “Over the third quarter, our efforts centered on delivering the reliable customer service that has allowed us to remain resilient and successfully maneuver through mixed markets. Our merchandise business remained solid, and our coal operations delivered strong volume growth. As we approach year-end, we are proud of the cohesive culture taking shape across our ONE CSX team that is helping to drive positive business results, and we are encouraged to see improving sequential trends in some of our key end markets.”
Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.
Click here for more FreightWaves articles by Joanna Marsh.