CSX: Old Man Winter to take a bite out of 1Q earnings; Sease to head corporate communications

Severe winter weather that's challenged operations and hampered volume likely will negatively impact CSX Corp.'s earnings in the first quarter, perhaps by 10 cents per share, Executive Vice President and Chief Financial Officer Fredrik Eliasson said yesterday during his presentation at the J.P. Morgan Aviation, Transportation and Industrials Conference in New York City.

"However, we still expect full-year earnings growth in 2014, though at a more modest rate than previously anticipated" he said, according to a press release. "The underlying strength in our merchandise and intermodal markets combined with visibility to several million new tons of domestic coal [will help] offset the first quarter impact."

After several years of excess inventory at utility plants in CSX's service territory, coal inventories now are close to normal levels as a result of the colder-than-normal winter, said Eliasson. In addition, broad-based growth in the company's merchandise and intermodal markets is expected to continue in 2014 based on the strength of macroeconomic expansion, opportunities afforded by natural gas drilling and conversions from highway to rail.

"To continue to promote modal conversion, CSX is making strategic investments to capitalize on an estimated 9 million truckloads in the East that would benefit from intermodal service," said Eliasson. "The company is expanding its Northwest Ohio Intermodal Terminal to leverage growth in the small- and mid-sized markets CSX now reaches as a result of its combined corridor and hub-and-spoke strategies."

Looking ahead, the Class I expects to continue generating sustainable, profitable growth by leveraging its diverse business portfolio while continuing to price above inflation and drive annual efficiency gains of at least $130 million, said Eliasson. CSX continues to target a high-60s operating ratio by 2015 and a mid-60s ratio longer term, he said.

Meanwhile, CSX yesterday announced the appointment of Gary Sease as vice president of corporate communications, effective March 30. He will succeed Vance Meyer, who helped strengthen the company's brand and develop social media capabilities over the past nine years.

Sease most recently was director of corporate communications. Prior to joining CSX in 1986, he was a reporter at The Florida Times-Union and served a stint at United Press International.

"Gary is a skilled and experienced communications professional and leader who seeks to address the needs and expectations of CSX's many audiences with candor, efficiency and insight. With extensive media relations, regulatory, financial and management communications background, he will build on the successes Vance brought to CSX," said Ellen Fitzsimmons, CSX's EVP of law and public affairs, in a press release.