CSX Corporation released earnings for Q3 2012 on October 16th.
They reported a net income of $455 million vs $464 million in Q3 2011, showing
a decline of 1.9% year-over-year. This breaks a four-quarter streak of profit
increases. A mild winter caused coal demand to be suppressed; coal composes
more than a fourth of the revenue for CSX. International volume of the company
grew 10%, in part due to the success of the Maersk business. The reported EPS
was $.44, beating consensus marginally, which was $.43, and outperforming Q3
2011 earnings of $.43. Reported revenues were $2.89 billion, missing
expectations set at $2.93 billion. Shares of CSX were down 2.2% in the
afternoon sharing at $21.15.
Looking
forward, the company sees itself as a neutral outlook for the fourth quarter.
Estimated EPS for Q4 is $.47, and estimates are $1.85 for the fiscal year. Coal
will continue to be challenged by low gas prices and high utility stockpiles,
but the industrial, agricultural, construction, and domestic sectors all have
favorable outlooks. There is uncertainty going forward with the company for Q4,
as coal is becoming less demanded and CSX could be looking at moderate labor
inflation. CSX sees itself with only moderate growth for the future.
- Peter Rodrigues, Industrial Junior Analyst
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