CSX 'Barometer' Shows Improving US Economy: CEO
As railroads go, so goes the economy, and CSX's results show the U.S. economy may be improving, Chief Executive Michael Ward told CNBC Wednesday.
"We are a good barometer of the economy and we did see some uptick in September," he said.
For instance, his railroad is seeing some growth in shipments to the nation's retailers for the Christmas shopping season.
"It’s a normal fall peak where retailers are stocking the stores for the Christmas time," he said. "We do expect continued growth, not robust but modest, in the coming quarters."
Late Tuesday CSX reported 43 cents in earnings, meeting the analyst consensus expectation.
"If you look at our 10 major markets, five grew, two were flat and three were down," he said. "Clearly the economy moderated some," Ward said.
He added that exported coal shipments have been strong, with CSX expecting to ship 40 to 42 million tons this year compared with 30 million last year. In the U.S., however, coal demand has been affected by low natural gas prices.
Shipment of auto parts has recovered from supply shortages resulting from the Japanese earthquake and tsunami earlier this year, he said.
"If you look at inventories right now they’re at 49 days" rather than the preferred 60 days, Ward said. "This year there’ll be light vehicle production of around 12.9 billion vehicles and the expectation is for 13.8 billion next year. We expect the automotive sector to pick up steam as the year progresses and then next year."