Sunday, January 29, 2012

Freight Railroad Volume Down, Profit Up, Boss Out

Departure of Chief Operating Officer as Revenue Rises
Shipping News Feature

US – Despite an 8% drop in coal shipments, a commodity representing almost a quarter of its revenue and a fall of over 5% in their intermodal cargo which accounts for 35% of turnover, CSX the US freight railroad still managed to post a profit up 6% in the last quarter of 2011. The rise against last year of stock earnings up to $0.43 per share was attributed to improved rail freight rates across the board.

Net Income for the three months to 30th December reached $457 million against last years $430 despite an overall drop in volume of 4%. Coal carriage dropped due to milder weather and less demand from generating companies which tend toward cheaper gas but this was partly offset by the revival in the US automotive and construction markets where demand rose, in the latter case the weather again being an important factor. CSX’s Michael J. Ward, chairman, president and chief executive officer commented:

“CSX once again delivered record earnings per share while investing in resources to support high customer service levels and growth in the near- and long-term. Our performance in 2011 has set a strong foundation for growth, and CSX remains committed to achieving a 65 percent operating ratio by no later than 2015.”

Mr Ward remained tight lipped over the circumstances of the departure of David A. Brown who left the company suddenly last week. A statement was issued stating Mr Brown ‘was no longer with the company’ and announcing his replacement with Oscar Munoz as executive vice president and chief operating officer who has been the company’s chief financial officer since 2003 and his former role has been handed to Fredrik Eliasson, a sixteen year veteran CSX executive.