CSX Corp. saw its earnings fall 27% in the first quarter as coal revenue dropped by the same percentage and as the railroad continued to adapt to service changes brought about by two hurricanes late last year.
“Since I came to CSX, we have been clear about our commitment to lead with service. Consistent, reliable, excellent service is what strengthens our relationship with customers, expands our markets, and ultimately drives proper growth. We did not fulfill that commitment this quarter,†CEO Joseph Henrichs told investment analysts during the company’s quarterly conference call Wednesday afternoon.
Weather and other challenges CSX usually faces in the first quarter were exacerbated by work on two major construction projects — enlarging the Howard Street Tunnel in Baltimore, Maryland, to accommodate double-stacked trains and the Blue Ridge Subdivision rebuild along the Tennessee-North Carolina border, Hinrichs said.
“We take full accountability for our performance this quarter and we are not standing still. The team is aligned, our expectations are clear, and we are taking actions to stabilize our operations, improve efficiency, and enhance coordination across the entire One CSX team,†he said.
After markets closed Wednesday, CSX reported net income of $646 million in the first quarter, down from $880 million in the first quarter of 2024. Declines in coal revenue, fuel surcharge and merchandise volume were partially offset by the effects of higher merchandise pricing and growth in intermodal volume, the company reported.
Coal revenues were $461 million in the quarter, down 27% from $632 million in the first quarter of 2024.
“Export coal decreased primarily due to reduced production, including outages at customer facilities, and weather impacts on the overall supply chain. Domestic coal decreased due to lower thermal shipments to river terminals and reduced shipments to steel manufacturing locations, partially offset by higher shipments to utility plants,†the company said in its financial report issued Wednesday after markets closed.
The amount of coal hauled to domestic customers fell 4% to 9.2 million tons. Export coal tonnage decreased 12% to 10.2 million tons. Total tonnage was down 8%.
