JACKSONVILLE, Fla – CSX did better in its earnings report than expected, but still faces a tough road ahead.
The corporation said Tuesday that its fourth-quarter profit declined 5 percent. CSX announced fourth quarter net earnings of $466 million or 48 cents per share. That’s compared to $491 million or 49 cents per share during the same period in 2014. Even though the numbers aren’t great, they’re still better than the projected profit per share of 46 cents that analysts surveyed by Zacks Investment Research expected.
The railroad's $2.78 billion revenue fell short of the $2.92 billion analysts expected.
CSX was able to offset that deficit by cutting its expense. The company was able to cut expenses by 13 percent thanks to cheaper fuel and lower labor costs.
Company CEO Michael J Ward said he expects earnings to continue to drop next year.
“With negative global and industrial market trends projected for 2016, full-year earnings per share are expected to be down compared to 2015,” Ward said in a company statement. “CSX will continue to be rigorous about efficiency, resources and service quality in order to maximize shareholder value and achieve a mid-60s operating ratio longer term.”
The decline in the demand for coal is a big reason for the slip. Coal volumes fell 32 percent during the quarter, leading to a 40 percent drop in revenue for the segment.
The company also hauled fewer agricultural products, chemicals and construction materials during the quarter.