CSX profits fall 22% as new CEO takes charge but performance expected to improve

CSX’s earnings fell 22% in the third quarter as the railroad completed two major construction projects that were limiting traffic, but volume was still up slightly and the results were dampened by a one-time charge.

jacksonvilleThe Florida-based company said Thursday it earned $694 million, or 37 cents per share, in the quarter. That’s down from $894 million, or 46 cents per share, a year earlier. But without the $164 million goodwill impairment charge, the railroad would have earned $818 million, or 44 cents per share.

The adjusted figure is above the 43 cents per share predicted by analysts surveyed by FactSet Research.

CSX’s performance declined last year due to construction projects, which limited the railroad’s flexibility and reduced capacity. CSX completes repairs and renovation of a major tunnel from Hurricane Helene baltimore last month, which will help in improving its performance going forward.

Thursday’s report was the first after new ceo steve angel Took the job at the end of last month. The railroad is under pressure from investors such as Ancora Holdings to find another railroad to merge with, so CSX can better compete with the merged Union Pacific-Norfolk Southern Railroad if the $85 billion deal is approved. But both of CSX’s potential merger partners – BNSF and CPKC Railroads – have said they are not interested in a deal because they believe the industry can better serve customers through cooperative agreements and avoid all the potential headaches that would come with a merger.

Most observers believe that CSX and BNSF will suffer losses if the Union Pacific–Norfolk Southern merger is approved. That transcontinental railroad would be able to cut delivery times by more than a day because it would not have to shuttle shipments between railroads in the middle of the country. So far, CSX and BNSF say they can reap most of the benefits of the merger through cooperative agreements.

Engel, 70, has never worked on a railroad before, although early in his career he supervised a GE locomotive manufacturing facility. Most recently he served as CEO of Linde and Praxair and oversaw the merger of two companies that supply industrial gases to other companies.

CSX is one of the largest railroads in North America, operating in the eastern United States.