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Railroad CSX stock jumps on earnings, share buy-back; CEO sees efficiencies
April 20, 2017 / 4:06 PM / 5 months ago

Railroad CSX stock jumps on earnings, share buy-back; CEO sees efficiencies

NEW YORK, April 20 (Reuters) - Shares of railroad operator CSX Corp jumped more than 6 percent on Thursday after the company reported better-than-expected quarterly earnings and its CEO said it aims at lower costs, including job reductions, and improved margins.

The company also announced a new share repurchase program and said it expects record efficiency gains on its way to a full-year 2017 operating ratio in the mid-60s.

Chief Executive Hunter Harrison said in a call with analysts that the No. 3 U.S. railroad also plans to bring 250-300 jobs it has in India to the United States.

Harrison said the Jacksonville, Florida-based railroad would trim costs, including through employee attrition, to improve margins through 2017 and beyond.

“It’s not going to happen overnight,” he said, adding: “I think you can have industry leading margins. I think you will have.”

The company’s stock hit a life high of $51.28 in early trading on Thursday and was last trading up 6.5 percent at $49.98 on Nasdaq.

Harrison, who was appointed chief executive officer earlier this year, said he expects to see attrition in the “8.5 - 9 percent” range, but declined to specify the number of reductions. He noted, however, that the plan includes employees, contractors, consultants, “all of the above - everybody that gets a check.”

Regarding the jobs in India, Harrison said: “I can’t worry about India right now. I’m more worried about CSX and Jacksonville and made in America.”

CSX on Wednesday said its quarterly net profit gains were driven by rising freight volumes across most of the markets it covers and said it plans to cut costs and boost profitability moving forward.

Reporting by Luciana Lopez; additional reporting by Allison Lampert in Montreal; Editing by Dan Grebler

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