Jacksonville, Florida-based CSX Corp. (NYSE: CSX – $27.07) announced net earnings of $507 million for the third quarter versus $509 million for the same period in 2014, which translates to a third quarter record $0.52 per share, compared to $0.51 in the prior year and a penny ahead of consensus. Total revenues of $2.94 billion were down from $3.22 billion in the third quarter of 2014 and fell short of analyst projections of $2.97 billion. The rail and intermodal carrier said revenue per unit was down 6% as pricing gains in the quarter were more than offset by negative mix and lower fuel recoveries. Comparable sales increased across all major markets and coal pricing in the quarter was positively affected by the fixed/variable contract structure, as a result of declining volume on those contracts. At the same time, expenses declined 11% on the collective effect of continued low fuel prices, cost reductions reflecting lower volume and savings from efficiency initiatives. The resulting $933 million in operating income drove a third quarter record operating ratio of 68.3 percent. CSX reaffirmed its full-year expectations for earnings per share growth in the mid-single digits. The company said its financial targets remain intact despite expectations for 2015 coal revenue to decline about $450 million primarily due to continued low natural gas prices and high inventory levels. The company now expects domestic coal volume to decline by more than 10% in 2015, while the full-year outlook for export coal volume remains approximately 30 million tons. Coal headwinds are now also expected to continue in 2016. With these results, full-year earnings should stay in the $2.00 range and the outlook for 2016 is mainly positive. Although the high-margin coal business will likely never return to its glory days, the cost reduction story is intact and CSX’s long-term total return potential is good.