A 3% drop in revenue put pressure on CSX’s net profits for the second quarter of 2023, according to financial results that the company released late Thursday.
Revenue at the eastern U.S. Class I railroad fell 3% to $3.7 billion from the second quarter of 2022 amid lower fuel prices, reduced supplemental revenue, a decline in export coal benchmark prices and a decrease in intermodal volumes, the company said. While there were volume increases for coal and CSX’s merchandise segment — including “solid gains in merchandise pricing” — those factors weren’t enough to offset the revenue decline, according to CSX.
Net income for CSX (NASDAQ: CSX) in the second quarter of 2023 was $996 million, or 49 cents per diluted share, down 15% from $1.18 billion, or 54 cents per diluted share, in the second quarter of 2022. Second-quarter 2022 results were also affected by a $122 million gain related to a property sale agreement with the Commonwealth of Virginia.
Operating income fell 13% to $1.48 billion, while operating ratio (OR) was 59.9%, compared with 55.4% in the second quarter of 2022. OR is a metric that investors sometimes use to gauge the financial health of a company, with a lower OR implying improved health.
Expenses increased 5% year over year to $2.2 billion amid higher labor and fringe costs as well as higher depreciation and amortization expenses.
“The ONE CSX team continued to build momentum this quarter as our merchandise and coal businesses continued to demonstrate significant volume gains,” CSX President and CEO Joe Hinrichs said in a release. “Though intermodal activity remains challenged, our strong service performance distinguishes us in the marketplace and is attracting shippers to our network. We look forward to meeting the opportunities ahead in the second half of the year and over the long term as we position CSX for sustainable, profitable growth.”
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