New York (HedgeCo.Net) – Jacksonville-based CSX Corp’s profit fell 6.1 percent in the third quarter according to their regulatory filing yesterday, thanks to reduced freight in a sour U.S. economy. This is the first time in the last five quarters that the railroad company has seen a decrease in profit.
Net income for the third quarter totaled $382 million, down $25 million from a year ago while revenue rose 18 percent to almost $3 billion.
While per-share earnings rose from 91 to 94 cents, it is because the company had reduced the amount of outstanding stock.
CEO Michael Ward maintains a positive outlook, saying CSX has strong liquidity and plenty of access to credit.
“CSX delivered impressive financial results in a challenging economy,” Ward said in a statement. “Our resilient business portfolio and disciplined operations continue to generate substantial earnings growth for shareholders.”
The company recently made headlines for its drawn out proxy battle with hedge funds TCI and 3G Capital Partners. After reluctantly placing two representatives from the funds on the Board of Directors, an appellate court denied their attempt to withhold two more seats in September. CSX was forced to concede, giving the activist hedge funds four seats total on the Board.
Despite the loss in profit, CSX increased their operating income by 31 percent to $733 million by moderating fuel costs and a “focus on productivity and cost control.” They are predicting that full-year earnings will come out at the “low end” of the estimated $3.65 to $3.75 a share.
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