8-KOther Events

CSX CORP 8-K Report (Sep 4, 2002)

Filed September 4, 2002For Securities:CSX

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.

Frequently Asked Questions

The primary reason is weaker than anticipated coal demand from utility customers, leading to a projected 5% decrease in coal carloads and an estimated $35 million reduction in coal segment revenue for the quarter.

CSX expects revenue gains from merchandise, automotive, and intermodal segments to largely offset the decline in coal revenue, indicating some underlying economic strengthening. However, total rail and intermodal operating income is still projected to be slightly down year-over-year.

CSX anticipates overall earnings per share to be significantly higher than the prior year primarily due to gains realized from real estate transactions and a reduction in interest expenses, which are expected to outweigh the impact of lower coal volumes and increased operating costs.

CSX is scheduled to report its third-quarter earnings on October 24, 2002.