|May 17, 2016|
|CSX CFO Shares Expectations for Second Quarter and Full Year|
JACKSONVILLE, Fla. – May 17, 2016 – CSX Corporation Executive Vice President and Chief Financial Officer Frank Lonegro spoke with investors and analysts today at the Bank of America Merrill Lynch Transportation Conference in Boston, updating them on second-quarter volume trends and the company’s plans to continue managing through the transition in its business mix.
“We are seeing year-to-date volume declines across most of our markets, reflecting continued low global commodity prices, the strong U.S. dollar, and the transition in the energy markets,” Lonegro said. “For the second quarter, we now expect high-single digit volume declines, which will negatively impact second quarter earnings.”
At the same time, continued service improvements are supporting strong pricing through this business cycle. With the impact of improving service and ongoing initiatives to drive further network efficiency, CSX now expects efficiency savings for the full year to exceed $250 million, approaching a company record. However, market forces are still expected to more than offset the gains in safety, service, pricing and efficiency, resulting in the company’s first full-year earnings decline since the recession.
Looking forward, CSX is driving long-term strategies to maximize its evolving business portfolio, including transforming its network to match resources with demand, leveraging technology solutions for service and efficiency, investing in the future of intermodal, and continuing to focus on delivering excellent service for customers. As the company’s business transitions to merchandise and intermodal markets, these initiatives are designed to drive earnings growth and margin expansion as CSX continues to target a mid-60s operating ratio longer term.