CSX railroad profit up 9% on higher fuel surcharges, rates

January 26, 2023 GMT
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CSX locomotives rest together on tracks at CSX North Framingham Yard, Tuesday, Jan. 24, 2023, in Framingham, Mass. CSX railroad will release its fourth-quarter earnings report Wednesday afternoon and tell investors about what it expects in 2023. (AP Photo/Steven Senne)
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CSX locomotives rest together on tracks at CSX North Framingham Yard, Tuesday, Jan. 24, 2023, in Framingham, Mass. CSX railroad will release its fourth-quarter earnings report Wednesday afternoon and tell investors about what it expects in 2023. (AP Photo/Steven Senne)

OMAHA, Neb. (AP) — CSX hauled in 9% more profit in the fourth quarter as the railroad hauled less cargo but charged higher shipping rates and tacked on more fuel surcharges.

The Jacksonville, Florida-based railroad said Wednesday that it earned $1.02 billion, or 49 cents per share, last quarter. That’s up from $934 million, or 42 cents per share, the year before.

That topped the 47 cents per share that the 27 Wall Street analysts surveyed by FactSet expected.

President and CEO Joe Hinrichs, who joined CSX in the middle of last fall’s difficult contract fight with 12 rail unions, said he’s “really proud of the progress we’ve made. We’re now at levels we haven’t seen in quite some time. We need to deliver that consistently throughout the year and that’s a really big focus of ours.”

CSX’s trains are running more smoothly now because the railroad has hired hundreds of additional employees over the past year to help handle the freight. CSX said it had 6,886 train crew employees on average in the fourth quarter, up from 6,397 a year earlier. Nearly 800 more conductors are in training.

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Hinrichs said his main focus now is on continuing to improve customer service by reliably picking up and delivering shipments on time and by addressing some of its employees’ quality-of-life concerns. Throughout the contract negotiations, workers said they were frustrated by demanding schedules that put many of them on call 24-7 and the lack of paid sick time.

CSX eased its attendance policy this month to ensure workers aren’t penalized for medical appointment or hospitalizations, and it tweaked the way workers are assessed points for missing shifts. But Hinrichs didn’t specify what other changes are in the works.

“We are having meaningful conversations with our union partners on a number of these topics -- listening to each other and challenging each other to find creative solutions that can work for the employees, our customers and the company,” he said.

CSX said its revenue increased 9% to hit $3.73 billion, which was in line with Wall Street expectations. Increases in fuel surcharges and shipping rates drove revenue higher even though volume slipped 2%. The railroad said last month’s severe winter weather modestly hurt volume in December.

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The railroad said its expenses jumped 10% to $2.27 billion with fuel costs increasing 46%.

Hinrichs said he expects volume to grow faster than the roughly 0.5% rise in gross domestic product that’s forecast this year as the railroad’s service continues improving.

CSX is one of the nation’s largest railroads, and operates more than 20,000 miles (32,000 kilometers) of track in 26 Eastern states and two Canadian provinces.