Frank Lonegro, CSX Corporation executive vice president and chief financial officer, updated the company’s third quarter expectations and full-year guidance at the Cowen and Company 9th Annual Global Transportation Conference in Boston.
“Third quarter earnings per share are expected to decline slightly from second quarter levels, based on high single digit volume reductions that are partially offset by improving efficiency benefits and strong pricing gains that reflect a service product that meets and exceeds customer expectations,” stated Lonegro.
Lonegro also noted the company’s expectations for total full-year coal tonnage is now expected to decline between 20 percent and 25 percent year-over-year. He pointed out that export coal is now expected to be around 25 million tons for 2016, as global market conditions have shown modest improvement recently.
Lonegro also said the company expects efficiency savings to exceed $350 million for the full year, reflecting the ongoing momentum in efficiency initiatives across the CSX network.
Outlining the CSX of Tomorrow strategy that is designed to maximize opportunities in the company’s evolving business mix to drive earnings growth and margin expansion, Lonegro said the company is focusing on its high-density routes serving merchandise and intermodal growth. CSX plans to: redeploy capital to extend sidings that drive longer, more efficient trains; advance technology automation to further enhance efficiency; and for intermodal terminals and double-stack clearance projects to capture additional share of the estimated 9 million truckload market opportunity in the east. These initiatives are expected to further CSX’s progress toward its target of a mid-60s operating ratio longer term.