Summary
CSX Corporation (CSX) announced at the J.P. Morgan Aviation, Transportation and Defense Conference on March 9, 2010, that it anticipates strong double-digit earnings per share growth for 2010. This positive outlook is driven by expected robust volume and revenue increases, particularly in export coal shipments projected at 30 million tons for the year, coupled with anticipated improvements in operating ratio. Additionally, CSX Intermodal, a subsidiary, has entered into a new jointly-marketed domestic interline container program called UMAX with Union Pacific Corporation. While this agreement is expected to cause a revenue reduction of $40-$50 million quarterly for CSX Intermodal starting in the second quarter of 2010, the company anticipates a neutral near-term impact on operating income, with a positive long-term effect. Financial consideration was also provided, which will be amortized over the agreement's term. Investors should note these statements are forward-looking and subject to various risks and uncertainties.
Key Highlights
- 1CSX expects strong double-digit EPS growth for 2010.
- 2Projected export coal shipments of approximately 30 million tons in 2010.
- 3Anticipated strong volume and revenue growth contributing to EPS outlook.
- 4Expected improvement in operating ratio for 2010.
- 5CSX Intermodal launches new UMAX program with Union Pacific.
- 6UMAX program expected to cause $40-$50 million quarterly revenue loss for CSX Intermodal starting Q2 2010.
- 7Near-term operating income impact from UMAX program expected to be neutral, with positive long-term effects.