CSX posts Q2 revenue decline, adjusts 2019 outlook

CSX's second-quarter revenue fell 1 percent to $3.06 billion compared with the previous year's quarter, as merchandise growth was offset by intermodal weakness, the Class I announced yesterday.

The railroad posted Q2 net earnings of $870 million, or $1.08 per share, versus $877 million, or $1.01 per share, in the same quarter last year, CSX officials said in a press release.

CSX's Q2 operating income grew 2 percent to $1.31 billion from $1.28 billion a year ago. Volume fell 4 percent to 1.58 million units, with merchandise traffic up 1 percent to 697,000 units but intermodal loads down 10 percent to 658,000 units.

Also during the period, CSX set a company second-quarter record for its operating ratio, which improved to 57.4 percent from 58.6 percent a year ago.

Expenses fell 3 percent year over year to $1.76 billion, driven by continued efficiency gains and volume-related savings, company officials said.

“I am extremely proud of our dedicated CSX employees for once again achieving new record levels of efficiency this quarter, while also driving a significant improvement in safety,” said President and Chief Executive Officer James Foote. “These results reflect the strength of our operating model, and combined with continued improvements in our best-in-class customer service, represent significant progress toward our goal of being the best run railroad in North America.”

However, CSX is revising its full-year 2019 revenue outlook to a 1 percent to 2 percent decline. The company is "taking a cautious forecasting approach given economic uncertainty," according to CSX's conference call with, and presented to, analysts yesterday.

"Both global and U.S. economic conditions have been unusual this year, to say the least, and have impacted our volumes. You see it every week in our reported carloads," Foote said in the conference call, as reported by CNBC. "The present economic backdrop is one of the most puzzling I have experienced in my career."

Foote has more than 40 years of experience in railroading, and has been CSX's chief executive since 2017.