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CSX's First-Quarter Operating Ratio Falls Under 60 Percent On Higher Profits

CSX's First-Quarter Operating Ratio Falls Under 60 Percent On Higher Profits


CSX (NYSE: CSX) achieved an operating ratio of less than 60 percent in the first quarter amid continued efforts to employ precision scheduled railroading (PSR) throughout its network.

The railroad, whose network serves primarily the eastern U.S., reached an operating ratio of 59.5 percent in the first quarter of this year, compared with an operating ratio of 63.7 percent in the first quarter of 2018. Operating ratio, which is often used by investors to gauge a company's profitability, measures operating expenses as a percentage of revenue. A lower percentage indicates that the company is making more profit.

First-quarter net earnings totaled $834 million, or $1.02 per share, which is 20 percent higher than net earnings of $695 million, or $0.78 per share in the first quarter of 2018.

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This first-quarter profit increase comes as CSX continues to deploy PSR throughout its network. PSR, which can lower expenses because it maximizes a company's assets, is an operational tool that seeks to schedule railcars on a fixed schedule rather than on an on-demand basis.

"The CSX team of exceptional railroaders continues to execute across all aspects of our business, delivering new all-time high service levels," said CSX president Jim Foote, president and chief executive officer. "These results reflect the strength of our Company's operating model and our commitment to providing a best-in-class service offering to our customers."

CSX posted volume gains for several commodities, including automotive, core chemicals, agricultural and food products and minerals. Volumes were flat for metals, while fertilizer volumes declined.

Domestic intermodal volumes also fell as CSX shed low-density lanes, but international intermodal volumes rose amid new service offerings to inland ports.

For coal, domestic coal volumes fell amid lower prices for natural gas, a competing generation fuel, but domestic coke and iron ore rose on increased domestic steel production. Export coal volumes were down for metallurgical coal but up for thermal coal.

Image sourced from Pixabay

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