Summary
CSX Corporation (CSX) filed an 8-K on September 7, 2011, to disclose remarks made by its Executive Vice President and CFO, Oscar Munoz, at the Dahlman Rose & Co. Global Transportation Conference. The primary focus of the disclosure was to reaffirm the company's positive long-term financial guidance, which includes expected compound annual growth rates of 18-20% for EPS and 12-14% for operating income through 2015, using 2010 as a base year. Additionally, CSX reiterated its target of achieving a 65% operating ratio by 2015. While long-term prospects remain strong, supported by the economic and environmental advantages of rail transport, the company acknowledged some near-term impacts from a moderating domestic and global economy. Specifically, projected export coal volumes for the current year were revised to a range of 40 to 42 million tons. The company also indicated that its operating ratio for the current year, while expected to be at a record level, might slightly exceed the high-60's target.
Key Highlights
- 1CSX reaffirmed its long-term financial guidance, targeting 18-20% EPS compound annual growth rate through 2015 (base year 2010).
- 2The company also confirmed its commitment to a 12-14% operating income compound annual growth rate through 2015.
- 3CSX reiterated its strategic goal to achieve a 65% operating ratio by no later than 2015.
- 4Near-term economic moderation has led to revised projections for export coal volumes, now expected to be between 40-42 million tons for the current year.
- 5The company anticipates its current year operating ratio may slightly exceed the high-60s target, despite expecting a record level.
- 6CSX expressed continued confidence in its long-term outlook, citing the inherent economic and environmental benefits of rail and its diverse market portfolio.