CSX Corp. (CSX) Reaffirms Q2, FY15 EPS Outlook

CSX Corp. (NYSE: CSX) Chief Financial Officer Fredrik Eliasson reviewed the company's quarter-to-date volume and service performance and reaffirmed second quarter and full-year 2015 earnings expectations at the Deutsche Bank Global Industrials & Basic Material Conference in Chicago.

Eliasson also reviewed the company's decade of strong financial performance, during which CSX expanded margins more than 1,600 basis points and delivered average annual growth in earnings per share of 20 percent. This performance was achieved while managing through a significant decline in the company's coal business, historically its most profitable market.

"While overall volume is tracking slightly below the levels in the second quarter of last year, service is improving steadily and we remain on track to deliver second quarter earnings per share that are flat to slightly up," Eliasson said. "Delivering excellent service continues to underpin CSX's ability to create strong shareholder value by pricing above inflation, driving ever more efficient operations, and growing merchandise and intermodal businesses faster than the economy."

Key service measures continue to improve in the second quarter, as resources come on line in critical areas of the network. On-time originations and arrivals, dwell time and velocity have all improved during the quarter, and more meaningful improvements are expected in the second half of the year.

The company's intermodal traffic, its main growth market, as well as its construction sector are producing volume growth quarter-to-date. At the same time, CSX sees increasing headwinds in its coal markets. Full-year domestic coal volume is expected to be down at least five percent reflecting low natural gas prices, and export coal volumes are expected to decline to 30 million tons for the year as the stronger U.S. dollar and overseas commodity prices reduce global demand for U.S. coal.

For 2015, CSX continues to expect earnings per share growth in the mid-to-high single digit range and meaningful margin expansion as it progresses toward a mid-60s operating ratio longer-term.

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