Oscar Munoz, CSX Corp.s No. 2 executive, is leaving the Jacksonville-based railroad company to become chief executive officer of United Continental Holdings Inc. Gooden has helped lead CSX’s growth and value pricing efforts.
The move is surprising to some analysts, who are asking why would he leave CSX (NYSE: CSX), a railroad giant, when he was likely to be tapped as CEO Michael Ward’s successor.
The company noted that it delivered strong financial, service and efficiency improvements in the first six months of 2015, but expects the second half of the year to be more challenging given intensifying headwinds in its coal markets.
CSX Corporation announced all-time record quarterly financial results for the second quarter of 2015. Operating income for the railroad came in at more than $1 billion for the first time in company history. The railroad also saw an all-time record in operating ratio of 68.8 percent.
Net earnings came in at $553 million or an all-time record of $0.56 per share, an increase from the reported $529 million or $0.53 per share of the second quarter of 2014. CSX expects to deliver mid-to-high single digit earnings per share growth for 2015.
“While we saw challenges in a number of markets, CSX employees delivered an even safer, more reliable and more differentiated service product this quarter,” Chairman and CEO Michael J. Ward said. “We expect the momentum in network performance we saw in the second quarter to accelerate, continuing to create value for our customers and shareholders.”
Revenue declined six percent due to the impact of lower fuel recovery. At the same time, continued low fuel prices and savings from efficiency initiatives reduced expenses for the railroad by nine percent.
Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
Kansas City Southern reported a decrease in earnings in a press release July 17. The railroad reportedly saw a 10 percent decrease in revenue to $586 million as compared to the second quarter of 2014.
Operating income saw a decrease of 13 percent to $187 million. Operating ratio saw a 1.1-point increase to 68.1 percent compared with last year’s second quarter operating ratio of 68.3 percent. Reported net income totaled $112 million or $1.01 per share, a 15 percent decrease compared to the reported $130 million or $1.18 per diluted share for the second quarter 2014.
Overall, the railroad reported that carload volumes were six percent lower for the quarter. Second quarter revenue declined in all commodity groups except chemicals and petroleum, which grew by one percent. However, operating expenses also saw a decrease of eight percent to $399 million.
“KCS continued to scale its operations in both the U.S. and Mexico and has made strides in improving its network fluidity,” stated CEO David L. Starling. “Our actions contributed to the company attaining a solid second quarter operating ratio despite volume challenges, particularly in its energy commodity group. We expect our system performance and operating metrics to continue to improve throughout the remainder of the year.
“As evidenced in the weekly industry carload data, there are still uncertainties in many of the primary markets served by rail. However, KCS’ average daily volumes increased each month throughout the second quarter and the initial results from the first few weeks of July suggest the positive trend may be continuing.”
Canadian National Railway reported increases in revenue for the second quarter of 2015. Net income saw an increase to C$886 million or C$1.10 per diluted share, over last year’s reported C$847 million or C$1.03 per diluted share for the same quarter. These results included a deferred income tax expense of C$42 million (C$0.05 per diluted share) resulting from the enactment of a higher provincial corporate income tax rate.
Excluding the deferred income tax expense, adjusted diluted earnings per share increased 12 percent to C$1.15 as compared to last year’s second quarter reported diluted earnings per share of C$1.03.
Operating income saw an increase of eight percent to C$1,362 million, while revenues for the quarter were flat at C$3,125 million. Carloadings decreased by three percent and revenue ton-miles declined by seven percent.
Operating ratio for the railway improved by 3.2 points to 56.4 percent over last year’s reported 59.6 percent.
“I’m proud of our very solid second quarter results, driven by the team’s swift action to recalibrate resources and double-down on efficiency, while continuing to improve customer service,” President and CEO Claude Mongeau said. “We’re focused on our long-term agenda and investing C$2.7 billion in CN’s capital program this year to support it, with an emphasis on the integrity and safety of the network.”
In a press release June 21, Canadian Pacific Railway announced the highest-ever net income for the second quarter and the lowest operating ratio for the period in the company’s history.
Net income rose to a record quarterly high of C$390 million or C$2.36 per diluted share, an improvement of 12 percent. Adjusted earnings per share gained 16 percent to C$2.45. Revenues for the railway remained unchanged at C$1.65 billion.
Operating income climbed 10 percent to C$646 million. Operating ratio fell to a second-quarter record of 60.9 percent, a 420-basis-point improvement. Adjusted earnings per share advanced 16 percent to C$2.45.
“CP remains disciplined during this period of economic uncertainty in identifying opportunities to control costs and improve efficiency to offset near-term headwinds,” CEO E. Hunter Harrison said. “Even in the face of this economic slowdown, CP’s commitment to providing the best service at the lowest cost will continue to serve us well moving forward.”
Union Pacific reported a decrease in earnings for the second quarter in a press release June 23. Operating revenue was down 10 percent to $5.4 billion as compared to the second quarter of 2014. Net income for the railroad came in at $1.2 billion or $1.38 per diluted share, a three percent decline as compared to last year’s reported net income of $1.3 billion or $1.43 per diluted share.
Operating income is down 11 percent to $1.9 billion. UP’s operating ratio of 64.1 percent is 0.6 points worse compared to the second quarter of 2014. The company also repurchased 8.0 million shares in the second quarter at an aggregate cost of $834 million.
“Solid core pricing gains were not enough to overcome a significant decrease in demand,” President and CEO Lance Fritz said. “Total volumes in the second quarter were down six percent, led by a sharp decline in coal. Industrial products and agricultural products also posted significant volume decreases. However, we made meaningful progress right sizing our resources to current volumes, and I am encouraged to report that we made these improvements while posting strong safety performance.
“While the volume outlook remains uncertain, we remain laser focused on operating safely and efficiently no matter what the market environment. We will continue to reduce costs and improve productivity as we further align resources with demand. Longer term, we continue to be optimistic about the strengths of our diverse rail franchise.”
Norfolk Southern railroad reported decreased earnings results for the second quarter of 2015.
Net income for the quarter was $433 million, a 23 percent decrease compared to the $562 million record set in the same quarter of 2014. Operating revenues saw a decrease of 11 percent to $2.7 billion, a result of lower fuel surcharges and coal volumes. Gains in intermodal and merchandise traffic were offset by losses in coal volumes.
Income from railway operations declined 20 percent to $814 million. Railway operating expenses also saw a decrease of six percent to $1.9 billion. Diluted earnings per share came in at $1.41. NS’s railway operating ratio was 70.0 percent.
“While we face short-term pressure, particularly as we clear fuel surcharge revenue and coal headwinds, Norfolk Southern is well positioned to continue improving service, which will reduce costs and add value to our customers,” CEO James A. Squires said. “Growth within the intermodal franchise, consumer spending, housing-related momentum and improved manufacturing activity all support an optimistic longer-term outlook. We have a strong legacy of success, and we are taking the right steps to continue value creation for our customers, the communities we serve, our employees and our shareholders.”
Another round of targeted tank car and rail inspections in New York found 62 defects, including one “critical” safety defect that required immediate corrective action, Gov. Andrew Cuomo announced on Wednesday.
The inspections are part of the governor’s efforts to address the safety of crude-by-rail shipments. State and federal teams examined 524 tank cars and about 152 miles of track and 38 switches during the inspections.
Last week, inspection teams from the New York State Department of Transportation (NYSDOT) and Federal Railroad Administration (FRA) inspected tank cars at Canadian Pacific’s Kenwood Yard in Albany, CSX Transportation’s Selkirk Yard in Albany County and Frontier Yard in Buffalo, and the Buffalo & Pittsburgh Railroad’s D&E Yard in Buffalo. They also inspected various CP and CSX mainlines.
MARYVILLE, Tenn. — A fire continued to burn Thursday afternoon at the site where a train car carrying hazardous material derailed and caught fire in eastern Tennessee, and officials said firefighters have been trying to keep neighboring rail cars cool as they make efforts to move them away from the flames.
At a 4:30 p.m. news conference Thursday in Maryville, Tennessee, Craig Camuso, CSX regional vice president for state government affairs, said firefighters are getting as close to the damaged 24,000-gallon tank car as they can, given the heat.
The derailment late Wednesday prompted the evacuation of thousands of people within a mile-and-a-half radius.
The Massachusetts Department of Transportation (MassDOT) has completed the $23 million acquisition of the Framingham Secondary Rail Line from CSX Corporation.
With the acquisition of the 21-mile rail line between Framingham and Mansfield, Mass., MassDOT can now connect the Framingham/Worcester, Needham, Franklin, and the Attleboro/Northeast Corridor commuter rail lines. The line also will provide added rail capacity for passenger trains to switch to alternative routes in cases where capital projects may cause disruptions to normal service.
The Framingham Secondary Line is also a major rail corridor for the shipment of freight between several key points in eastern Massachusetts, including Readville, Milford, Franklin, Fall River, New Bedford, and Worcester.
RALEIGH, N.C. — A lawsuit filed Friday, May 1 by Amtrak and CSX alleges that a trucking company caused a March train derailment that injured 55 people by failing to take safety precautions or warn that the track was blocked.
The lawsuit in a Raleigh federal court blames Guy M. Turner Inc. of Greensboro for the March 9 crash in which an Amtrak passenger train collided with an oversized tractor-trailer.
The lawsuit says the driver blocked the crossing in disregard of safety signs and failed to notify CSX, which owns the track, or Amtrak that the railway was blocked. It also says that the trucking company’s Turner Transfer division failed to take reasonable safety precautions.
CSX Corporation announced increases in its first quarter earnings April 14. Net earnings for the first quarter of 2015 came in at $442 million, an 11 percent increase over the $398 million reported for the same quarter of 2014.
The company announced a 13 percent increase of earnings per share to $0.45 over last year’s reported $0.40 per share for the same quarter. Operating income also saw an increase of 14 percent to $843 million and operating ratio improved 330 basis points to 72.2 percent. Revenue for the quarter came in at $3.0 billion.
The CSX board of directors has approved an increase in the quarterly dividend and a new share repurchase program. The quarterly dividend has increased 13 percent to $0.18 per share. The new $2 billion share repurchase program is expected to be implemented over the next 24 months.
“In this dynamic economic and business environment, CSX’s core earnings remain strong and we are continuing our drive to provide excellent service for our customers and value for our shareholders,” Chairman and CEO Michael J. Ward said. “Our commitment and confidence in CSX’s future is underscored by the positive shareholder actions we’re taking today.”
Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
Canadian National Railway reported its financial and operating results for the first quarter ended Mar. 31. The railway saw increases across the board in its earnings.
CN announced net income for the quarter at C$704 million or C$0.86 per diluted share, up from 2014’s first quarter reported net income of C$623 million or C$0.75 per diluted share.
Diluted earnings per share saw a 30 percent increase to C$0.86 from the reported C$0.66 from the first quarter last year. Net income also saw a 28 percent increase to C$704 million over last year’s reported C$551 million. Operating income saw a 30 percent increase to C$1,063 million. Revenues for the first quarter increased 15 percent to C$3,098 million; revenue ton-mile increased by seven percent and carloadings increased nine percent. CN’s operating ratio improved by 3.9 points to 65.7 percent over last years 69.6 percent.
“CN turned in a solid first-quarter performance thanks to strong freight demand and continued productivity improvements, helped in part by easier winter conditions compared with last year’s polar vortex,” President and CEO Claude Mongeau said. “CN is pleased to affirm its outlook for double-digit EPS growth in 2015 versus last year’s adjusted diluted EPS of C$3.76, despite weaker than expected energy markets and a mixed economy.
“As always we remain committed to growing our business faster than the overall economy and doing so at low incremental cost. We are equally committed to running a safe railway and are increasing our 2015 capital envelope by C$100 million to C$2.7 billion to sustain additional rail infrastructure safety investments.”
Canadian Pacific Railway announced the lowest first quarter operating ratio in the company’s history and the highest-ever net income for the period. Operating ratio came in at a record 63.2 percent for the first quarter 2015, an 880 basis point improvement over the first quarter of 2014. Net income came in at an all-time quarterly high of C$320 million or C$1.92 per diluted share, an improvement of 33 percent.
CP’s revenues climbed 10 percent to a first quarter record of C$1.67 billion and adjusted earnings per share saw an improvement of 59 percent to C$2.26.
“CP’s success in the first quarter of the year is a result of hard work by its people and a business model that responds nimbly to any shift in economic conditions,” CEO E. Hunter Harrison said. “CP’s relentless focus on rail safety and cost control has created a solid foundation for growth, innovation and creative collaboration with customers.
“The diversity of the business and efficiency of CP’s network and team has the company well positioned for the rest of the year. We are confident in our plan and our people, and are committed to achieving our goals for 2015.”
Kansas City Southern reported decreases in earnings for the first quarter of 2015 as compared to the first quarter earnings of 2014.
Revenue decreased one percent to $603 million. KCS’ operating income also saw a one percent decrease to $178 million. Operating ratio saw a 0.2 point increase to 70.5 percent or an adjusted operating ratio of 68.9 percent. The first quarter of 2014 saw an operating ratio of 73.7 percent. Diluted earnings per share also saw a two percent decrease to $0.91 and adjusted diluted earnings per share came in at $1.03.
Overall, the railroad reports that carload volumes were one percent higher than in the first quarter of 2014. KCS also saw a one percent decrease in operating expenses of $415 million for the quarter. Reported net income totaled $101 million for the first quarter of 2015.
“Lower than expected carloadings in a few commodity groups, particularly utility coal, coupled with a weak peso and the impact of low U.S. fuel prices on fuel surcharge revenues, combined to exert pressure on first quarter consolidated revenues,” CEO David L. Starling said. “We believe our ability to scale operating expenses and capital where necessary, provide KCS with the opportunity to improve earnings as 2015 progresses. In addition, we remain fully committed to managing our railroad in a manner designed to allow our company and its stockholders to benefit from the abundant growth opportunities that should emerge in the years ahead.”
Union Pacific Corporation reported mostly increases in earnings for the first quarter of 2015.
The railroad reported a first quarter net income of $1.2 billion or $1.30 per diluted share, a nine percent increase over last year’s first quarter of $1.1 billion or $1.19 per diluted share. Operating income increased seven percent to $2 billion and operating ratio improved 2.3 points to 64.8 percent.
Operating revenue stayed at $5.6 billion while total revenue carloads declined two percent compared to the first quarter of 2014.
“While we took actions during the quarter to adjust for volume decline, we did not run an efficient operation,” President and CEO Lance Fritz said. “We’ve had some challenges to start off the year, but we’re taking the steps needed to work through those challenges and realize the opportunities we see ahead. We expect to see solid improvement in network performance and cost efficiency over the coming months. As we leverage the strengths of our diverse franchise, we continue to be intently focused on safety, service and shareholder returns.”
Norfolk Southern Corporation reported a decrease in earnings for the first quarter 2015. Net income for the railroad saw a 16 percent decrease to $310 million compared to the $368 million that was reported for the first quarter of 2014. Income from railway operations came in at $606 million, a nine percent decrease compared to last year’s first quarter. Diluted earnings per share for the first quarter came in at $1.00 compared to last year’s $1.17.
NS reported a five percent decrease to operating revenues to $2.6 billion due to a lower fuel surcharge, lower coal volumes and lower average revenue per unit. Total volume saw a two percent increase, reflecting gains in intermodal and merchandise traffic. Railway operating expenses declined three percent to $2.0 billion, also due to lower fuel costs. NS reported an operating ratio of 76.4 percent compared to last year’s operating ratio of 75.2 percent for the same quarter.
“Our first quarter results reflected continued weakness in our coal markets along with a slowdown in network velocity in part caused by severe winter weather which impacted both our expenses and our volumes,” CEO Wick Moorman said. “Looking ahead, while the market uncertainties remain, the resources that we are deploying are driving improved network performance, and we expect our service levels will be significantly higher in the second half.”
OMAHA, Neb. – CSX now says that the railroad won’t deliver the double-digit profit growth it promised this year because coal demand remains weak.
Executives remain optimistic about the railroad’s prospects because service is improving, but they said Wednesday, a day after posting first-quarter earnings, that mid-to-high single-digit profit growth is likely in 2015.
On Feb. 22 the U.S. Department of Transportation’s (DOT) Federal Railroad Administration (FRA) announced that is now able to move forward with its full-scale forensic investigation into the derailment outside of Montgomery, W. Va., followed by a slower start earlier this week hampered by weather and safety concerns.
During a media conference in Boomer, W. Va., FRA announced next steps in its ongoing investigation into the incident, which includes participation from the Pipeline and Hazardous Materials Safety Administration (PHMSA). The FRA is the lead Federal agency charged with investigating Monday’s derailment.
“With the response and recovery effort now complete, and the dangers associated with the initial derailment now minimized, the FRA will now begin its thorough investigation into the derailment,” said Transportation Secretary Anthony Foxx. “I thank the emergency responders who stepped into harm’s way to evacuate the affected communities, and I am eternally grateful that no residents were seriously injured.”
On Monday, Feb. 16, a 109-car unit train pulled by two locomotives derailed 27 tank cars carrying Bakken crude oil near the Kanawha River, approximately 30 miles southeast of Charleston, WV. The Department’s FRA and PHMSA, the Environmental Protection Agency, the U.S. Coast Guard, and West Virginia state agencies have been at the site of the derailment since Monday evening.
“We are grateful to the first responders for evacuating residents safely, and grateful to the Coast Guard, the EPA and state and local agencies that worked together to immediately address urgent conditions at the derailment site,” said Sarah Feinberg, acting Administrator of the Federal Railroad Administration. “Now it is time for the FRA to begin our investigation into this incident in earnest, to identify any warranted enforcement actions, and to continue our work to ensure accidents like these do not continue.”
A full team of FRA investigators will remain in the Montgomery area for several days, and possibly weeks, as the investigation continues.
Initial activity at the derailment site focused on response and recovery, including controlling fires, containment of the crude oil release into surrounding areas, and protection of communities and drinking water sources near the derailment site. Although inclement weather, safety concerns for the community and its water supply, evacuations and fire containment limited the DOT’s initial steps in its investigation and data collection, the Department is now moving aggressively with a full-scale, thorough investigation into the cause of the derailment.
The FRA will now inspect all damaged tank cars, recover damaged rail from the accident site, and review maintenance and inspection records for rolling stock, track, signals, and locomotives. Equipment recovered from the accident site, including tank cars, tank car wheels and trucks, and damaged rail will be reassembled, documented, or reconstructed by FRA investigators at a location near the derailment site.
The FRA will systematically examine all recovered components to either eliminate or identify issues related to wheels, track, axles or other components that could have caused or contributed to the accident.
Additionally, the PHMSA is conducting testing of the crude oil product involved in the derailment to determine gas content, volatility, tank car performance and to ascertain compliance with federal hazardous material regulations related to proper product classification. The results of the inquiry will be included in FRA’s final investigative report.
“We continue to look into the composition of Bakken crude oil, which is why we took samples of the product to verify appropriate classification and whether emergency responders received the accurate information to respond to this derailment,” said Tim Butters, Acting Administrator of the Pipeline and Hazardous Materials Safety Administration.
Investigations into derailments can take significant time and resources. A full team of FRA investigators will remain in the Montgomery area for several days, and possibly weeks, as the investigation continues.
As the Department’s investigation continues, other federal and state agencies will continue to monitor the derailment site and surrounding areas to ensure it remains safe for residents. The EPA and the West Virginia Department of Environmental Protection will continue to work closely with the U.S. Coast Guard to test and monitor water quality and atmospheric conditions in the vicinity of the derailment.
Video images of a fireball billowing from the wreckage of a derailed train hauling Bakken crude are adding to pressure on federal regulators to act on new safety standards for oil shipments.
While there were no fatalities in the CSX Corp. accident in rural West Virginia on Feb. 16, the footage of flames and smoke rekindles public alarm over the prospect of tank cars rumbling through urban areas, according to a former U.S. Transportation Department official and a railroad consultant.
Oscar Munoz, CSX Corp.s No. 2 executive, is leaving the Jacksonville-based railroad company to become chief executive officer of United Continental Holdings Inc. Gooden has helped lead CSX’s growth and value pricing efforts.
CSX Corporation announced all-time record quarterly financial results for the second quarter of 2015. Operating income for the railroad came in at more than $1 billion for the first time in company history. The railroad also saw an all-time record in operating ratio of 68.8 percent.
Kansas City Southern reported a decrease in earnings in a press release July 17. The railroad reportedly saw a 10 percent decrease in revenue to $586 million as compared to the second quarter of 2014.
Canadian National Railway reported increases in revenue for the second quarter of 2015. Net income saw an increase to C$886 million or C$1.10 per diluted share, over last year’s reported C$847 million or C$1.03 per diluted share for the same quarter. These results included a deferred income tax expense of C$42 million (C$0.05 per diluted share) resulting from the enactment of a higher provincial corporate income tax rate.
In a press release June 21, Canadian Pacific Railway announced the highest-ever net income for the second quarter and the lowest operating ratio for the period in the company’s history.
Union Pacific reported a decrease in earnings for the second quarter in a press release June 23. Operating revenue was down 10 percent to $5.4 billion as compared to the second quarter of 2014. Net income for the railroad came in at $1.2 billion or $1.38 per diluted share, a three percent decline as compared to last year’s reported net income of $1.3 billion or $1.43 per diluted share.
Norfolk Southern railroad reported decreased earnings results for the second quarter of 2015.
Another round of targeted tank car and rail inspections in New York found 62 defects, including one “critical” safety defect that required immediate corrective action, 
The Massachusetts Department of Transportation (
On Feb. 22 the U.S. Department of Transportation’s (DOT) Federal Railroad Administration (FRA) announced that is now able to move forward with its full-scale forensic investigation into the derailment outside of Montgomery, W. Va., followed by a slower start earlier this week hampered by weather and safety concerns.