Jacksonville-based CSX Corp. can trace its roots in Northeast Florida to railroads opened about 150 years ago, but the history of the company begins with a rail line started in Baltimore nearly two centuries ago.
The Baltimore and Ohio Railroad was chartered in 1827 to serve Baltimore merchants with a 13-mile rail line powered by horses.
“As the successor to the B&O Railroad, for nearly 200 years CSX and the B&O Railroad have been integral to the growth of Maryland and Baltimore’s economies and communities,” CSX said in its annual proxy statement filed March 25.
A day later, CSX’s operations in Baltimore were severely impacted by the collapse of the Francis Scott Key Bridge, which not only closed a major highway indefinitely but also closed the Port of Baltimore at least temporarily as the massive cleanup operations begin.
A week after the bridge collapse, CSX began diverting some marine shipments to New York’s port and transporting them by train to and from Baltimore.
“While the timeline for resuming freight operations at the Port of Baltimore remains uncertain, we are in constant communication with our customers, providing timely updates on the status of their shipments. CSX is fully dedicated to meeting our customers’ transportation needs during this challenging period,” the company said in an emailed statement April 1.
CSX has not said specifically how much the tragedy in Baltimore will affect operations but it will likely disrupt shipments of coal, one of the company’s largest businesses.
“We are monitoring the potential impact to our rails coverage as the collapse of the bridge poses a challenge to coal exports and automotive imports due to the Baltimore port being the second largest hub for coal exports in the US as well as a major car port,” Morgan Stanley analyst Ravi Shanker said in an April 1 research note.
The port accounts for 28% of all coal exports in 2023, according to the U.S. Energy Information Administration.
Coal generated $2.5 billion in revenue for CSX in 2023, about 17% of its business, and much of its export coal shipments are sent from Baltimore.
CSX operates a coal terminal along Chesapeake Bay called Curtis Bay Piers, which the company’s website describes as one of the most efficient ports on the East Coast, after spending $60 million in improvements to the facility.
“The company currently intends to keep its Curtis Bay Coal Pier facility operational but will continue to assess the circumstances to determine appropriate actions moving forward,” CSX said in a March 26 statement.
Automobiles produced $1.2 billion in revenue last year, with CSX shipping vehicles from 35 distribution centers in the Eastern U.S.
CSX is scheduled to report its first-quarter earnings April 17 and while the Baltimore tragedy happened at the end of the quarter and won’t be reflected in the data, we can expect CEO Joe Hinrichs to offer more details on how operations are impacted.
“The State of Maryland and the City of Baltimore have been central to our operations for nearly two centuries, and we remain deeply connected to this dynamic region,” Hinrichs said in the company’s March 26 statement.
Major stock indexes are off to their best start in five years, but most Jacksonville stocks are lagging behind the overall market rally.
Only five of the 18 publicly traded companies headquartered in Northeast Florida beat the 10% gain for the Standard & Poor’s 500 index in the first quarter.
The best gain came from space technology company Redwire Corp., which has been mostly depressed since it went public in 2021.
Redwire rose 54% to $4.39 in the quarter, with most of the gain coming in the last half of March after it reported 2023 revenue rose 52% and projected 2024 revenue to rise another 23%.
The stock reached its highest level in almost two years at $4.79, but that’s still well below the October 2021 high of $16.98 shortly after Redwire went public.
Although Redwire has fallen short of the big revenue projections it made before going public, analysts remain positive on its potential.
“We believe Redwire continues to have healthy revenue backlog and visibility in support of its new 2024 revenue growth guidance,” Roth Capital Partners analyst Suji Desilva said in a research note after the year-end financial report.
“We are encouraged by a trend toward higher cash generation as the company grows its diversified space infrastructure revenue opportunity,” said Desilva, who maintains a “buy” rating on the stock.
Another relatively low-priced stock, Duos Technologies Group Inc., was another big gainer, rising 50% in the quarter to $4.34.
Duos, which provides technology mainly for the railroad industry, rose without issuing a financial report during the first quarter.
Duos said April 1 that fourth-quarter revenue fell 74% to $1.53 million.
Among higher-priced stocks, Fidelity National Information Services Inc. (FIS) and Dream Finders Homes Inc. each gained 23% to lead Jacksonville-based companies in the first quarter.
FIS has been rising after selling off a majority stake in merchant payments technology business Worldpay, which had produced disappointing results since it was acquired by FIS in 2019 and was a drag on the stock.
Investors are hopeful the company’s focus on its core banking technology business will lead to higher profits.
Dream Finders was the best performer among all Jacksonville stocks in 2023 and it continues to benefit from a surge in homebuilder stocks.
The S&P Homebuilders Select Industry Index rose 18% in the first quarter.
The one other Jacksonville company to beat the S&P 500 in the first three months of the year was Rayonier Advanced Materials Inc., which gained 18% to $4.78.
Investors are looking for a turnaround after five straight years of losses from continuing operations for the maker of cellulose specialties products.
The Home Depot Inc., which began expanding its professional contractor business with the 2015 acquisition of Jacksonville-based Interline Brands Inc., announced its biggest pro acquisition March 28.
The Atlanta-based company agreed to buy SRS Distribution Inc., which serves the roofer, landscaper and pool contractor businesses, for $18.25 billion.
Home Depot is best known for its store network catering to do-it-yourself homeowners, but it began growing its contractor business by acquiring Interline for $1.625 billion.
Interline provided maintenance, repair and operations products.
Home Depot followed the Interline deal with several other acquisitions for its Home Depot Pro division, including an $8 billion purchase of HD Supply Holdings Inc. in 2020.
The pro division now accounts for about half of Home Depot’s sales.
Home Depot reported 2023 sales of $152.7 billion.
SRS, which has 760 branches in 47 states, has annual sales of about $10 billion, Home Depot said.
Fairbanks Morse Defense announced March 26 it acquired Jacksonville-based AMMCON Corp., which makes fittings and assembled components for submarines and aircraft carriers.
Wisconsin-based FMD said the deal was its 11th acquisition since December 2020 as it grows its maritime defense industry business.
The company said the addition of AMMCON expands its products to additional customers in the U.S. Navy, Coast Guard and Military Sealift Command.
Terms of the deal were not announced.