CSX Profit Beats Estimates But Is Lower From Year Ago

CSX, the No. 3 U.S. railroad, on Tuesday reported a better-than-expected quarterly net profit, but much lower than a year ago due to plummeting freight volumes amid the ongoing recession.

The Jacksonville, Florida-based company reported first-quarter net income of $246 million or 62 cents per share, down nearly 30 percent from $351 million or 85 cents per share in the same quarter in 2008.

Analysts, on average, expected earnings per share for the quarter of 51 cents, according to Reuters Estimates.

The company's shares were up sharply in after-market trade, after closing at $28.39 in the regular session on the New York Stock Exchange. Click here for an after-hour quote.

CSX said revenue in the quarter fell 17 percent to $2.2 billion on a 17 percent decline in freight volumes.

The railroad said the decline was due to "significant weakness in industrial production, housing starts, and consumer spending, as well as in the agriculture and energy sectors" and it was taking action to cut costs.

"We are taking tough actions to right-size our operations in this challenging environment," Chief Executive Michael Ward said in a statement.

The major U.S. railroads have all posted robust profits in recent quarters despite weak freight volumes, thanks to strong pricing.

But with the precipitous decline in the U.S. economy over the past few months, analysts are watching the railroads carefully to see if they can maintain high prices in the downturn.

According to data released by the Association of American Railroads last week, U.S. railroads saw freight volumes down 16.7 percent in the first 13 weeks of 2009.

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