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CSX Corp.'s second-quarter 2016 revenue declined 12 percent to $2.7 billion, driven by a 9 percent decrease in volume that affected all markets but especially coal, which plummeted more than 30 percent.The company yesterday posted Q2 net income of $445 million, or 47 cents per share, down from $553 million, or 56 cents per share, in the same period last year.The volume decline more than offset pricing gains from an improving service product, according to a CSX press release."CSX continued to drive strong customer service and network efficiency in a challenging market, which is expected to persist throughout this year," said Michael Ward, chairman and chief executive officer. "In this environment, the company continues to right-size resources while making strategic investments to transform the company and capitalize on market opportunities to drive long-term value creation."At 47 cents per share, CSX's earnings topped analysts' consensus expectations for a quarterly earnings per share of 44 cents and Robert W. Baird & Co. Inc.'s estimate of 45 cents per share, said Benjamin Hartford, senior research analyst at Baird.The quarter's results "were slightly better than consensus' and our expectations, driven by upside from better-than-modeled operational cost savings," said Hartford in his CSX report. "Revenue was roughly in line with modeled estimates, but core pricing growth was slightly better than we had expected — only slightly decelerating from 1Q16’s growth rates."Expenses declined 9 percent in the quarter due to efficiency gains of $96 million, lower volume-related costs of $86 million as the company aligned costs with current and future market dynamics, and $56 million from lower fuel prices.The operating ratio rose 210 basis points year-over-year to 68.9 percent.Operating income fell 17 percent to $840 million compared with a year ago.Looking ahead, CSX continues to expect 2016's full-year earnings to decline, due to ongoing transition in the energy markets, as well as the impact of the strong U.S. dollar and low commodity prices. CSX remains focused on achieving a mid-60s operating ratio longer term, company officials said.
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