As CSX Corp. prepared to release its quarterly earnings report Aug. 5, company officials also were monitoring Hurricane Debby as it approached the Jacksonville-based company’s rail network.
“Fortunately, our teams have a lot of experience dealing with this,” CEO Joe Hinrichs said in a telephone interview after CSX reported basically flat second-quarter earnings.
CSX’s rail network operates throughout the eastern U.S. and Debby posed a threat to operations in several states.
“We did stop a lot of trains. We did park a lot of trains and locomotives in yards,” Hinrichs said.
After the storm passed through Florida, forecasts have it dumping large amounts of rain in Georgia and the Carolinas in the coming days.
“We’re worried about flooding, especially in that I-95 corridor,” Hinrichs said.
However, he is confident the company’s experience with prior storms has CSX ready for Debby.
“So far we feel pretty good about the response,” he said.
CSX reported second-quarter revenue of $3.7 billion, about the same as the second quarter of 2023, and earnings were unchanged at 49 cents a share.
CSX reported revenue gains in several freight categories, including a 5% increase in merchandise and 3% in intermodal shipments.
However, revenue from coal shipments dropped 12% due mainly to a decline in demand from domestic utilities, because of cheaper natural gas prices, Hinrichs said.
“For the time being it looks like we’re going to see softer domestic demand for coal,” he said.
However, export coal volume rose despite the impact of the March collapse of the Francis Scott Key Bridge in Baltimore, closing the port which is a key hub for CSX coal shipments overseas.
Hinrichs said CSX was able to find alternatives to ship coal before the port fully reopened in May, including rerouting shipments to operations in Virginia and Alabama.
The company also found ways to use smaller vessels to carry coal when the port partially reopened and transfer the coal to larger vessels for the overseas trips.
“I feel really good about what our team did, how we responded to it,” Hinrichs.
Projecting increases
Although CSX’s revenue was flat in the first half of the year, the company is projecting freight volume to increase by a low-to-mid-single digit percentage in the second half of the year.
CSX reported earnings after two days of big losses in the stock market, attributed to concerns about the direction of the U.S. economy.
The company reported its earnings after the market closed, and its stock fell $1.08, to $33 Aug. 5 before the report.
CSX’s stock has fallen 4.8% so far this year.
Despite the market’s pessimism, Hinrichs said CSX’s outlook for the economy hasn’t changed recently.
“We haven’t seen any kind of dramatic change in orders and what our customers are saying,” he said.
“We feel it was a strong quarter. We feel good about our opportunity for the rest of the year.”
Fidelity National Financial Inc. earnings rise
Separately, another Jacksonville-based Fortune 500 company, Fidelity National Financial Inc., reported higher second-quarter earnings after the market closed Aug. 5.
Fidelity said adjusted earnings rose by 23 cents a share to $1.01.
Revenue at its main business, title insurance, was basically unchanged from the second quarter but total revenue rose 2.9% to $3.16 billion as majority-owned subsidiary F&G Annuities & Life increased sales by 55%.
“While higher mortgage rates are impacting residential purchase volumes, F&G is benefiting from strong demand for its products given demographic tailwinds, prior investments in building out its multi-channel sales platform and continued strong investment performance,” Chairman Bill Foley said in a news release.