CSX profit dips but meets Wall Street expectations

Reuters
A CSX freight train heads westbound out of a tunnel into Harpers Ferry, West Virginia October 16, 2012. REUTERS/Gary Cameron

DETROIT (Reuters) - No. 3 U.S. railroad CSX Corp <CSX.O> on Tuesday reported a slight dip in quarterly net profit, in results that met Wall Street analyst expectations, and said conditions for its business were improving after taking a hit from low commodity prices and a strong U.S. dollar.

CSX reported a slight increase in coal freight volumes in the fourth quarter from a year earlier after nearly two years of decline which have pummeled the U.S. railroads. The railroads have seen volumes of coal, a high-margin business, slump as utilities switched to burning cheaper natural gas. The strong U.S. dollar had also hurt exports.

The Jacksonville, Florida-based company reported fourth-quarter net income of $458 million or 49 cents a share, compared with $466 million or 48 cents per share a year earlier. Analysts had expected earnings per share of 49 cents.

"With business conditions gradually improving and the ongoing transformation (of CSX)... we will continue to deliver sustainable shareholder value," chief executive Michael Ward said in a statement accompanying the earnings release.

CSX reported revenue of $3.04 billion, versus $2.78 billion a year earlier. Analysts had expected revenue of $2.89 billion.

The company reported higher freight volumes in most commodity groups, with coal up 8 percent and automotive shipments up 11 percent.

The railroad's profit dipped slightly because of higher costs for labor, materials, fuel and depreciation.

(Reporting By Nick Carey; editing by Diane Craft and David Gregorio)