OMAHA, Neb. – CSX reported a 24% drop in the railroad's third-quarter profit Thursday as it hauled 2% less freight, but the CEO said customers are noticing that its trains are running more smoothly.
The Jacksonville, Florida-based railroad said it earned $846 million, or 42 cents per share, in the quarter. That's down from $1.1 billion, or 52 cents per share, a year ago. The results fell just short of the 43 cents per share that Wall Street was expecting, according to a survey of analysts done by FactSet Research.
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The railroad's results show a mix of demand across various industries with a strong 19% jump in auto shipments and 9% growth in coal carloads nearly offsetting weak demand for consumer products and agricultural shipments. CSX improved the speed of its trains to an average of 17.6 mph in the quarter from 15.8 mph a year ago showing that its network was operating smoothly.
“Over the third quarter, our efforts centered on delivering the reliable customer service that has allowed us to remain resilient and successfully maneuver through mixed markets,” said Joe Hinrichs, CSX president and chief executive officer.
Hinrichs said customers are noticing that the railroad's service has been consistently better over the past year, and that is opening the door to more conversations about increasing the amount they ship on the railroad. By most measures, CSX's performance is even better than it was before the pandemic.
“The reality is the railroads have not provided a consistent reliable service product to customers over time,” said Hinrichs, who joined the railroad a year ago. CSX is working to fix that. “Our commitment to them is not only to have class leading service, but to do our best to be repeatable and to be consistent.”
Revenue declined 8% to $3.57 billion at CSX as fuel surcharges and export coal prices both declined and shipments of the imported goods consumers want declined.
CSX's new Chief Operating Officer Mike Cory said the railroad noticed an uptick in injuries and accidents involving new employees this year, so CSX increased the length of training new conductors receive and recruited a network of mentors to help teach them the craft after they finish their initial training. Three CSX employees have died on the job since June, prompting unions to call for better training and a review of the use of remote-control locomotives.
CSX said its expenses declined 2% to $2.28 billion.
CSX is one of the nation’s largest railroads, operating trains on more than 20,000 miles (32,000 kilometers) of track in 23 Eastern states and two Canadian provinces.