Rail giant CSX announced Q4 earnings of $0.43 per share, which is higher than the $0.39 per share expected.Norfolk Southern also announced earnings better than expected. Earnings came in at $1.30 per share. Analysts were looking for $1.19 per share.
Railroaders move a wide array of goods across the country including energy, lumber and automobiles. As such, they are considered reliable bellwethers of the economy.
For the quarter, total revenue of $2.9 billion declined 2 per cent. The company saw an increase in merchandise and intermodal shipments, but these gains were more than offset by declines in coal resulting from low natural gas prices, high coal inventory at utilities and lower global demand. As a result of the lower revenue, which was partially offset by strong efficiency gains, operating income declined 4 per cent to $804 million and the operating ratio increased 60 basis points to 72.1 per cent.
A similar sentiment was shared by Norfolk Southern:
While the fourth quarter reflected declines in coal shipments, we also saw steady intermodal volume gains coupled with improved volumes in our chemicals, auto, and housing sectors,
Both stocks are higher in after-hours trading.
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