CSX Corporation reported a 22% decrease in third-quarter earnings, attributing the decline to ongoing construction projects and a one-time charge, despite a slight increase in rail volume. The company, based in Jacksonville, Florida, announced on Thursday that it earned $694 million, or 37 cents per share, down from $894 million, or 46 cents per share, in the same period last year. Excluding a $164 million goodwill impairment charge, adjusted earnings were $818 million, or 44 cents per share, narrowly surpassing analyst expectations of 43 cents per share according to FactSet Research.
The company has faced challenges over the past year as construction, including repairs from Hurricane Helene and a tunnel renovation in Baltimore, limited rail traffic and capacity. These projects were completed last month, and CSX expects performance to improve as a result.
This quarterly report is the first since Steve Angel took over as CEO in late September. Angel, 70, previously led GE’s locomotive division and most recently served as CEO of Linde and Praxair, overseeing their merger.
CSX is currently under investor pressure, particularly from Ancora Holdings, to pursue a merger with another major railroad. The goal is to remain competitive if the proposed $85 billion merger between Union Pacific and Norfolk Southern is approved. However, potential partners BNSF and CPKC have indicated they are not interested in merging, suggesting instead that the industry could better serve customers through cooperative agreements and avoid complications associated with mergers.
Industry observers note that if the Union Pacific-Norfolk Southern deal goes through, CSX and BNSF may be at a disadvantage. The merged railroad could reduce delivery times by eliminating the need to transfer shipments between companies in the central United States. Despite this, both CSX and BNSF maintain that they can achieve many benefits of a merger through collaboration rather than formal consolidation.
“Angel, 70, has not worked at a railroad before although earlier in his career he oversaw GE’s locomotive building unit. Most recently he served as CEO of Linde and Praxair and oversaw the merger of those two companies that supply industrial gasses to other companies.”
