Summary
CSX Corporation issued an 8-K filing on September 4, 2002, to announce that weaker than anticipated coal demand from utility customers will negatively impact its third-quarter 2002 earnings. The company expects coal carloads to be down approximately 5% year-over-year, resulting in an estimated $35 million revenue reduction in this segment. Despite this setback, CSX anticipates that growth in merchandise, automotive, and intermodal carloads, driven by some economic strengthening, will largely offset the decline in coal revenue. Overall, while total rail and intermodal operating income is projected to be slightly lower than the prior year, the company expects overall earnings per share for the third quarter to be significantly higher than the 47 cents reported in Q3 2001. This improvement is primarily attributed to gains from real estate transactions and reduced interest expenses. CSX plans to report its third-quarter results on October 24, 2002.
Key Highlights
- 1Weak coal demand is expected to reduce Q3 2002 earnings, with coal carloads down ~5% and revenues down ~$35 million year-over-year.
- 2Merchandise, automotive, and intermodal carloads are projected to increase, partially offsetting the coal decline.
- 3Total rail and intermodal operating income is expected to be slightly down from $237 million in Q3 2001.
- 4Overall earnings per share for Q3 2002 are anticipated to be significantly higher than the 47 cents reported in Q3 2001.
- 5Higher Q3 earnings are largely due to real estate gains and lower interest expenses.
- 6Rail expenses in Q3 will be higher year-over-year due to car hire reclaims and other unanticipated costs.
- 7Full-year rail and intermodal expenses are expected to remain consistent with 2001 levels.