JACKSONVILLE, Fla. (AP) — Higher rates helped freight railroad CSX Corp. boost profits by 14 percent despite a drop in coal shipments.
CSX said Tuesday that it earned $449 million, or 43 cents per share, in the first quarter, up from $395 million, or 35 cents per share, a year ago.
Analysts expected 38 cents per share, according to FactSet.
Revenue rose 6 percent to $2.97 billion. Analysts expected $2.91 billion.
CSX is the first large railroad to report first-quarter results. Railroads are a snapshot of the economy because so many consumer goods, from autos to yard fertilizer, move by train.
CSX said freight volumes rose just 1 percent in the first quarter compared with a year ago, but overall rates rose 5 percent.
Coal accounts for more than one-fourth of CSX revenue, and shipment volumes of that were down by 14 percent. But the company said it was able to boost coal rates by 10 percent to offset the decline.
Demand for coal used in generating power was hurt by a big drop in natural gas prices, which made that fuel more attractive to utilities. Mild winter weather didn't increase demand, either.
CSX said the market for utility coal is likely to be even weaker in the second quarter, but the Jacksonville, Fla., company said it's on track to top 2011 earnings this year.
Shipments of agricultural products dipped 1 percent as demand for ethanol, which is made from corn, dropped because motorists have been buying less gasoline. Ethanol is added to much of the gasoline used in the U.S.
Auto shipments, while a small portion of CSX revenue, jumped 18 percent. The railroad saw smaller increases for metals, forest products and food and consumer products. CSX charged higher rates in all those categories.
Chairman and CEO Michael J. Ward said the company was "off to a fast start in a year that will be dynamic and challenging." He said most transportation markets were performing very well.
Executives were scheduled to hold a conference call with investors Wednesday morning.
The shares rose 36 cents to close at $22.44 before the report. In after-hours trading, they rose another 57 cents, or 2.5 percent, to $23.01.
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