CSX CEO Tells Latest on Proxy Battle
CSX Chief Executive Michael Ward just can’t do enough. At least not for the hedge funds that have been trying to take control of his company.
The rails company reported a 19% jump in second-quarter earnings Tuesday, and revenue rose 15%. CSX also affirmed its full-year guidance.
“When you consider the economy that’s out there, the fuel prices that are out there, I think we did a great job,” said Ward, who also serves as chairman and president.
But TCI Group and 3G Capital have just won four seats on CSX’s board of directors and they’ve been pushing hard to remove Ward from his post, saying the company could still perform better.
Funny, though, because according to a recent Financial Times story, TCI just had its worst month ever in June, losing $1 billion.
Ward told Cramer on Wednesday that the hedge funds seemed to have softened a bit on wanting him out, claiming, “They want to work with existing management,” he said.
What’s most important is “shareholder value creation,” Ward said. “Regardless of how the eventual board composition comes out, they have the same interests we do, which is to drive that value creation.”
While other industrial-based companies are struggling, CSX has been outperforming thanks to its exposure to key commodities markets, such as coal, phosphates, ethanol and grain. And some of the company’s contracts are due for renegotiations, which means higher prices for CSX. Overall, strong commodity demand is driving the business right now.
“That man has never let us down,” Cramer said of the CSX CEO. “I’m sticking with Ward.”
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