By Tess Stynes
Railroad operator CSX Corp. estimated its domestic coal
shipments will decline at least 5% this year, though it still
expects to achieve its growth targets amid continued growth in its
merchandise and intermodal markets.
Ahead of an industry conference Wednesday, Chief Financial
Officer Fredrik Eliasson said in a news release that CSX still
expects to record strong first-quarter earnings growth and
double-digit earnings growth for 2015. However, he added that the
expected decline in coal volume stands to make its growth targets
more difficult to reach.
Overall, CSX estimated its freight volume will increase 3% for
the quarter.
Coal shipments are a major part of CSX's and other railroad
operator's businesses. In CSX's case, coal represented roughly 18%
of the company's total freight volume and roughly 22% of its
revenue for 2014.
The Jacksonville, Fla., company also expects more moderate
growth in shipments of crude oil than anticipated previously, amid
a slump in energy prices. Though crude shipments are a smaller
portion of rail shipments, they have been one of the
fastest-growing parts of the rail industry. In January CSX
estimated crude-by-rail represents less than 2% of CSX's total
business.
In its presentation Wednesday, CSX estimated that a crude-oil
train derailment in West Virginia last month will have a per-share
impact of a penny to two cents on first-quarter earnings.
Mr. Eliasson also reiterated the company's view that its
merchandise and intermodal markets to continue to grow faster than
the overall economy.
Write to Tess Stynes at tess.stynes@wsj.com
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