CSX Corp. (CSX) Updates on Q3 Outlook; Sees EPS Lower from Q2
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CSX Corporation (NYSE: CSX) Executive Vice President and Chief Financial Officer Frank Lonegro updated investors and analysts today at the Cowen and Company 9th Annual Global Transportation Conference in Boston about the company’s third quarter expectations, full-year guidance and long-term strategy for managing a changing business profile.
“Third quarter earnings per share are expected to decline slightly from second quarter levels, based on high single digit volume reductions that are partially offset by improving efficiency benefits and strong pricing gains that reflect a service product that meets and exceeds customer expectations,” said Lonegro.
Lonegro also updated the company’s expectations for total full-year coal volume, noting export coal is now expected to be around 25 million tons for 2016, as global market conditions have shown modest improvement recently. As a result, total full-year coal tonnage is now expected to decline between 20 percent and 25 percent year-over-year.
In addition, reflecting the ongoing momentum in efficiency initiatives across the CSX network, Lonegro conveyed the company’s expectation that efficiency savings will now exceed $350 million for the full year.
Looking longer term, Lonegro further outlined the CSX of Tomorrow strategy that is designed to maximize opportunities in the company’s evolving business mix to drive earnings growth and margin expansion. In focusing on its high-density routes serving merchandise and intermodal growth, the company plans to redeploy capital to extend sidings that drive longer, more efficient trains; for technology automation to further enhance efficiency; and in intermodal terminals and double-stack clearance projects to capture additional share of the estimated 9 million truckload market opportunity in the east. These initiatives are designed to further CSX’s progress toward its target of a mid-60s operating ratio longer term.
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