CSX Corporation Executive Vice President and Chief Operating Officer Cindy Sanborn updated investors and analysts on Nov. 9 at Baird’s 2016 Industrial Conference in Chicago regarding the company’s expectations for fourth quarter and full-year performance as well as progress on the company’s long-term strategy:
“In the fourth quarter, we expect an eight cent earnings per share impact related to costs associated with refinancing near-term debt,” Sanborn said. “While we now expect fourth-quarter earnings per share to be down, absent the eight-cent impact, the company’s earnings remain consistent with its prior guidance of flat to slightly down from the prior year.”
Sanborn highlighted the ongoing dynamic business environment, including the company’s expectations that volume will be roughly flat on a reported basis, which includes an extra accounting week in the fourth quarter this year. CSX says strong cost performance is helping to offset those challenges to deliver solid financial performance throughout the year. Through the third quarter, CSX has delivered about $550 million in cost savings through both efficiency initiatives and volume-variable savings.
CSX says these savings reflect aggressive actions related to three of the company’s major cost drivers – labor, fuel and assets – with gains in train length and crew savings, record fuel efficiency, and improved locomotive productivity and asset reliability.
Long term, CSX says it continues its focus on the transition away from coal and toward more service-sensitive merchandise and intermodal markets. CSX notes this progresses achieving a mid-60s operating ratio longer-term.