CSX Sees More Modest EPS Growth In Fiscal 2014 On Harsh Winter Impact In Q1

(RTTNews) - Railroad operator CSX Corp. (CSX) said Wednesday that it expects earnings for the full-year 2014 to grow at a more modest rate, citing the challenging weather conditions during the first quarter. The negatively impact of the harsh winter weather on first-quarter earnings are already approaching about $0.10 per share.

The company's Chief Financial Officer Fredrik Eliasson revealed this earlier in the day at the J.P. Morgan Aviation, Transportation and Industrials Conference in New York City.

Eliasson also discussed a variety of financial and market-specific topics, including the first quarter weather impact on CSX, macroeconomic drivers of company growth, and long-term earnings guidance.

"The severe weather has challenged CSX operations and volume, with the impact on first quarter earnings now expected to approach 10 cents per share. However, we still expect full-year earnings growth in 2014, though at a more modest rate than previously anticipated, with the underlying strength in our merchandise and intermodal markets combined with visibility to several million new tons of domestic coal helping to offset the first quarter impact," Eliasson said.

However, the company noted that inventories are now close to normal levels as a result of the colder than normal winter weather. The company was for the past several years carrying excess inventory at coal-fired utility plants.

The Jacksonville, Florida-based company said it expects to deliver double-digit earnings per share growth on a sustainable basis leading to a compound annual growth rate of 10 to 15 percent off over the two year period, despite the more modest earnings growth expected in 2014.

The company also added that it continues to target a high-60s operating ratio by 2015 and also achieve a mid-60s operating ratio over a longer-term.

In Wednesday's regular trading session, CSX is currently trading at $28.48, down $0.36 or 1.25% on a volume of 0.10 million shares.