CSX Profit Tops Estimates as Cost Cuts Help Soften Cargo Drop

(Bloomberg) -

CSX Corp.’s second-quarter profit beat analysts’ estimates as cost cuts helped ease the blow of rail freight declines.

Adjusted earnings fell to 47 cents a share from 56 cents a year earlier, CSX said in a statement on Wednesday. That topped the 44-cent average of 25 analyst estimates compiled by Bloomberg. Revenue declined 12 percent, the company said.

CSX and other large North American railroads have furloughed workers, sidelined locomotives and sought to boost efficiency to make up for the freight slump. Large U.S. railroads saw cargo traffic drop 8.3 percent in the second quarter, according to weekly data from the Association of American Railroads.

The railroad’s shares rose 4 percent to $28.11 at 3:05 p.m. in New York.

CSX reduced its freight volume outlook in May as coal shipments continued to slump more than expected. The fossil fuel, which had made up more than 30 percent of CSX’s revenue before 2012 and had dwindled to only 15 percent in the first quarter, is being replaced by cheaper and cleaner-burning natural gas at many power plants. CSX also grappled with severe flooding in West Virginia that disrupted the Jacksonville, Florida-based railroad’s network.