UPDATE 2-CSX profit down but beats Wall St view; stock up

* Posts Q1 EPS of 62 cents, vs consensus of 51 cents

* Says freight volumes down 17 pct in Q1

* Prices mostly flat, lower fuel costs lift profit

* Shares up 7 percent in after-hours trade (Recasts first paragraph; adds details of profit from filing and updates stock action)

CHICAGO, April 14 (Reuters) - CSX Corp (CSX.N), the No. 3 U.S. railroad, on Tuesday posted a better-than-expected quarterly net profit, sending its stock up 7 percent as it took steps to cut costs and keep prices steady amid a steep drop in freight volumes due to the recession.

The Jacksonville, Florida-based company reported first-quarter net income of $246 million or 62 cents per share, down nearly 30 percent from $351 million or 85 cents per share in the same quarter in 2008.

Analysts, on average, expected earnings per share for the quarter of 51 cents, according to Reuters Estimates.

In after-market trade, CSX shares were up 7.2 percent at $30.60 from their official closing price on the New York Stock Exchange at $28.39.

Revenue in the quarter fell 17 percent to $2.25 billion from $2.71 billion on a 17 percent decline in freight volumes.

The railroad said the decline was due to "significant weakness in industrial production, housing starts, and consumer spending, as well as in the agriculture and energy sectors" and it was taking action to cut costs.

"We are taking tough actions to right-size our operations in this challenging environment," Chief Executive Michael Ward said in a statement. The railroad said a "wide range" of productivity initiatives had helped it trim operating expenses for the quarter by 17 percent to $1.73 billion from $2.09 billion a year ago.

CSX cut its fuel bill for the quarter to $191 million from $441 million last year.

In a filing with the U.S. Securities and Exchange Commission, CSX said that automotive-related freight volumes were down 53 percent, metal products fell 48 percent, lumber declined 25 percent, while phosphates and fertilizers dropped 34 percent. Coal carloads were down 6 percent.

Revenue per carload -- a telling benchmark for the railroads as it provides an indication of how strong their prices are -- was virtually flat at $1,584 from $1,580 in the first quarter of last year, CSX said in the filing.

Credit Suisse analyst Chris Ceraso described the revenue per carload as a "very big surprise" in a research note to clients. Credit Suisse had expected CSX to post a 9 percent decline in volumes. Ceraso said the drop in fuel costs was also another big surprise.

"We think it is more likely that the railroads fall short of the consensus rather than surprise to the upside," the Credit Suisse analyst wrote earlier in the day in an earnings preview note on CSX.