UPDATE 2-CSX profit up on higher pricing; stock rises

(Adds company comments on pricing outlook, analyst comment, stock action, byline)

By Nick Carey

CHICAGO, Jan 22 (Reuters) - Railroad CSX Corp (CSX.N: Quote, Profile, Research, Stock Buzz) on Tuesday reported a better-than-expected quarterly net profit as strong pricing offset higher fuel costs and weaker freight volumes, sending its shares up more than 4 percent.

The results came on a day when U.S. markets slid due to investor fears of a recession. CSX Chief Executive Michael Ward said that he did not expect a downturn, and the U.S. Federal Reserve's 75-basis-point interest rate cut should boost the economy.

"We still see growth in the economy this year," Ward told Reuters in a telephone interview. "It will be slower growth, but I don't think we'll see a recession."

Fourth-quarter net income rose more than 5 percent to $365 million, or 86 cents a share, from $347 million, or 75 cents a share, a year earlier.

Excluding one-time items, profit increased to 85 cents a share from 57 cents. Wall Street analysts had expected 64 cents before one-time items, according to Reuters Estimates.

"Any way you slice it, this was another solid quarter of double-digit earnings growth driven by improved productivity and solid pricing," Bear Stearns analyst Edward Wolfe wrote in a note for clients. "Still, based on its high-end valuation and increasingly difficult comparisons and expectations, we retain our Peer Perform rating."

CSX reported surface transportation operating income of $609 million, compared with $505 million a year earlier.