CSX railroad's second-quarter profit slipped 2% — even though the volume of its shipments was up by the same rate — as it scrambled to respond to the Baltimore bridge collapse in March that disrupted coal exports.
CSX said Monday that it earned $963 million, or 49 cents per share, in the second quarter. That's down from last year's $984 million, or 49 cents per share.
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But the results beat the 48 cents per share that analysts surveyed by FactSet Research predicted.
“I am proud of our railroad’s performance, including our team’s effective response to the disruptions at the Port of Baltimore," CSX CEO Joe Hinrichs said.
Baltimore is the nation's No. 2 coal export port, so the bridge collapse that closed the port caused significant disruptions. But CSX and its competitor in the east, Norfolk Southern, quickly worked to reroute shipments to other ports.
The railroad's revenue was flat at $3.7 billion, which was slightly ahead of the Wall Street predictions.
Expenses were slightly higher at $2.25 billion as labor costs crept up again.
Edward Jones analyst Jeff Windau said the results show CSX is still working to streamline its operations.
“They were able to really try to squeeze out the efficiency in the network. And they’re still looking at ways to do that,” Windau said. “And historically they’ve been very good at it.”
Railroad executives said they have found ways to lower their costs through things like working with customers to cut the number of times CSX picks up shipments a week and combining shorter trains into longer ones.
CSX predicts that volume and revenue will both be up by low-to-mid single digits in the second half of the year, but Hinrichs said the economy does appear more fragile than it was earlier this year.
“I think there is just a little more uncertainty about where the economy really is,” Hinrichs said.
Now that the National Transportation Safety Board has issued its final report on Norfolk Southern's disastrous derailment in East Palestine, Ohio, it should become more clear what kind of new safety regulations might come out of Congress. Hinrichs said he'll continue lobbying to make sure any law is focused on things that will make a meaningful difference in safety like the NTSB recommendations and not just politically popular ideas.
“That’s where we should focus on real safety: where the experts tell us where the opportunities are,” Hinrichs said.
Jacksonville, Florida-based CSX is one of the nation's largest railroads serving the eastern United States.
Its shares rose more than 4.5% in extended trading after the report.