(Reuters) – U.S. railroad operator CSX Corp on Thursday missed Wall Street estimates for third-quarter profit, as a decline in intermodal freight volumes more than offset pricing gains.
Inflationary pressures and higher borrowing costs have reduced consumer demand for goods, at a time when companies are still destocking inventories built up during the pandemic.
This has driven down freight volume hauled by rail, particularly in the intermodal segment, which involves shipping goods via two or more modes of transportation.
In addition to weak freight volumes, normalizing export coal benchmark prices from last year’s record highs also hit the railroad operator’s revenue for the quarter even as volumes grew year-on-year.
Revenue fell about 8% to $3.57 billion in the quarter ended Sept. 30. However, it came ahead of analysts’ estimates of $3.55 billion, according to LSEG data.
CSX’s operating ratio, a key profitability metric for railroads, was 63.8% in the reported quarter, up from 59.5% a year ago.
The company, which mainly operates in the eastern United States, posted net earnings of $846 million, or 42 cents per share, compared to $1.11 billion, or 52 cents per share, in the year ago period.
Analysts, on average, had expected earnings of 43 cents per share.
Union Pacific Corp, earlier on Thursday, posted a smaller-than-expected drop in earnings per share to $2.51.
(Reporting by Ananta Agarwal in Bengaluru; Editing by Shailesh Kuber)
