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While introducing CSX Corp.’s earnings conference this morning, Chairman, President and Chief Executive Officer Michael Ward referred to the fourth quarter as “another quarter of excellent financial results.” It was another record-setting one, too.

Operating income jumped 46 percent to a record $846 million, earnings per share climbed 48 percent to an all-time-high $1.14 and the operating ratio improved 5 points to a record 70 compared with fourth-quarter 2009 results. In addition, revenue rose 21 percent to $2.8 billion, volume increased 13 percent to 1.6 million units and net income soared 42 percent to $430 million. The quarter included an extra week because of CSX’s 52-/53-week fiscal reporting calendar; excluding the extra week, revenue rose 14 percent and volume increased 7 percent.

The Class I registered growth in just about every market the railroad serves and continued strong operational performance, said Ward.

Coal revenue jumped 26 percent to $807 million and volume rose 5 percent to 384,000 units primarily because of increased export volume driven by Asian and European markets, and higher domestic utility burn rates and greater U.S. industrial output, said Executive Vice President of Sales and Marketing Clarence Gooden. Intermodal revenue dipped 1 percent to $331 million — mostly because of the termination of a prior intermodal agreement — and volume rose 11 percent to 581,000 units, he said.

Meanwhile, merchandise revenue climbed 12 percent to $1.4 billion and volume increased 4 percent to 633,000 units, led by automotive and metals volume growth. CSX also notched revenue growth in the agriculture, industrial and housing/construction sectors.

In terms of operating expenses, quarterly costs rose 13 percent (including the extra week) to $2 billion compared with fourth-quarter 2009’s total. Labor and fringe expenses climbed 18 percent to $776 million primarily because headcount rose 2 percent to 30,083 and volume increased, said EVP and Chief Financial Officer Oscar Munoz. Fuel costs jumped 38 percent to $346 million as the average diesel price per gallon climbed 19 percent to $2.42, he said.

For the full year, CSX’s revenue increased 18 percent to $10.6 billion, earnings per share soared 40 percent to a record $4.06; operating income ballooned 35 percent to a record $3 billion; net income climbed 37 percent to $1.5 billion; operating expenses went up 12 percent to $7.5 billion; and the operating ratio improved 3.8 points to 71.1 compared with 2009 results.

The Class I expects to register a high-60s operating ratio in 2011 and a 65 ratio by 2015 through a “Grow to 65” initiative, said Ward. Also in 2011, the railroad plans to hire more than 2,900 additional workers — increasing headcount by 1 percent to 2 percent — to support business growth, offset attrition and ramp up positive train control (PTC)-related hiring.

“2010 was a year of momentum, and we expect that momentum to continue in 2011,” said Ward.

CSX also is budgeting $2 billion for capital expenditures this year compared with $1.8 billion spent in 2010. The dollars will be targeted at infrastructure and rolling stock investments, strategic capital to support the Grow to 65 initiative and ongoing PTC work, said Munoz.

— Jeff Stagl