CSX Beats Estimates, Raises Dividend
Eastern rail CSX Corp. (NYSE: CSX – $28.30) announced first-quarter net earnings of $398 million, or $0.40 per share, down from $462 million, or $0.45 per share in the same quarter of 2013, but three cents above Street expectations. Revenue grew 2% to $3.0 billion on volume increases of 3%, with strength in intermodal and merchandise markets more than offsetting declines in coal. However, operating income declined 16% to $739 million primarily due to the impact of harsh weather. As previously expected, CSX estimates that weather-related disruptions increased expenses by about $0.06 per share, and impacted revenue contribution by about two to three cents. Looking forward, CSX expects modest full-year earnings growth for 2014 on the strength of broad-based merchandise and intermodal gains and an improving domestic coal environment. In addition, the company remains confident in its ability to sustain double-digit earnings growth and margin expansion for its shareholders in 2015 and beyond. Thanks in part to strong cash flow and its long-term outlook, the Board of Directors increased the quarterly dividend payout by 7% to $0.16 per share, or $0.64 annually, which will yield investors 2.3% at current levels.