January 15, 2014 / 9:37 PM / 4 years ago

UPDATE 3 -CSX 4th-qtr profit misses Street view; coal volumes weak

Jan 15 (Reuters) - CSX on Wednesday posted a fourth-quarter profit that fell short of Wall Street’s estimates as rising shipments of chemicals, autos and agricultural products failed to make up for weak coal volumes.

Shares of the company fell 3 percent after the bell.

Expenses rose almost 7 percent in the quarter, led by higher costs for labor, materials and supplies.

Weak coal shipment volumes have been a problem for CSX and competitor Norfolk Southern as the shift to natural gas caused utility coal stockpiles to surge as demand for coal from power producers declined.

CSX, based in Jacksonville, Florida, relies more on coal than its peers because of the region where it operates, which includes the U.S. Appalachian coal basin.

CSX is the first of the major U.S. railroads to report quarterly results.

About a quarter of the company’s revenue comes from coal. For the fourth quarter ended Dec. 27, coal volumes for CSX fell 5 percent. Revenue from coal fell 9 percent in the quarter. Intermodal revenue rose 10 percent, while chemicals rose 17 percent.

Intermodal is the shipping of containers that can be moved from one form of transport to another, such as from train to ship.

CSX reported earnings of $426 million, or 42 cents a share, in the quarter, compared with $449 million, or 44 cents, a year ago. Last year, CSX was helped by a tax gain on real estate that added 6 cents a share to its quarterly earnings.

Overall revenue increased 5 percent to $3.0 billion.

Analysts, on average, had been expecting the company to earn 43 cents a share, on revenue of $3.01 billion, according to Thomson Reuters I/B/E/S.

Volumes of all shipments rose 6 percent.

Chief Executive Officer Michael Ward said in a statement that CSX was on track to benefit from an expanding U.S. economy.

The company said it was on target to keep its operating ratio in the high-60s by 2015. This year, it was at 71.1 percent. Operating ratio is a measure of management’s efficiency for reining in costs. The smaller the ratio, the greater the company’s ability to generate profit if revenue falls.

Shares of CSX, which touched a 10-year high in regular New York Stock Exchange trade on Wednesday, fell 3 percent to $28.31 in after-hours trade. The shares had closed up 1.2 percent at $29.23 in NYSE trade.

The shares CSX have risen almost 40 percent over the past year while the benchmark S&P 500 rose 12 percent.

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