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|CSX Expects More Modest Full-Year Earnings Growth Reflecting Challenging Weather Conditions|
"The severe weather has challenged CSX operations and volume, with the impact on first quarter earnings now expected to approach
After several years of excess inventory at coal-fired utility plants in CSX's service territory, inventories are now close to normal levels as a result of the colder than normal winter weather. In addition, broad-based growth in the company's merchandise and intermodal markets in 2014 will continue on the strength of macroeconomic expansion, opportunities afforded by the process of natural gas drilling, and conversions from highway to intermodal service.
"To continue to promote modal conversion, CSX is making strategic investments to capitalize on an estimated 9 million truckloads in the East that would benefit from intermodal service," said Eliasson. "To leverage that opportunity, the company is expanding its
Long-term, the company expects to continue generating sustainable, profitable growth for investors by leveraging its diverse business portfolio while continuing to price above inflation and drive efficiency gains of at least
With this as a foundation and with coal headwinds subsiding, CSX expects to deliver double-digit EPS growth on a sustainable basis. However, it is not clear whether the double-digit EPS growth expected in 2015 will be sufficient, in combination with the more modest earnings growth expected in 2014, to produce a compound annual growth rate of 10 to 15 percent off over the two year period. At the same time, CSX continues to target a high-60s operating ratio by 2015, which the company believes is still attainable. Longer term, the company remains focused on achieving a mid-60s operating ratio.
Melanie Cost, 904-359-1702