JACKSONVILLE, Fla. - November 6, 2013 - Fredrik Eliasson, CSX (NYSE: CSX) executive vice president and chief financial officer, discussed the company's recent financial performance today at the Baird Industrials Conference in Chicago, Ill. Eliasson reiterated expectations for 2013 earnings per share growth that will be slightly up from last year despite continued headwinds in both the export and domestic coal markets.
"The CSX team continues to overcome significant headwinds as the energy markets evolve in favor of natural gas and away from coal," said Eliasson said. "During this transition, we have still been able to generate earnings per share growth and value for shareholders as we quickly adapt to market changes and carefully manage the things we can control the most. We are confident that CSX will emerge an even stronger, more vibrant company as the operating environment stabilizes and the economy improves."
Eliasson highlighted the sustained growth in CSX's merchandise and intermodal businesses, which now comprises more than 80 percent of the company's volume. The company expects that business to continue growing at a rate above the general economy. Intermodal, a key driver of growth, now represents 40 percent of overall volume and is expected to increase further, reflecting the attractive economic value of converting freight from highway to rail.
CSX employs a dual intermodal strategy that includes both high-density corridors and a hub-and-spoke philosophy that also creates service density to open new small and medium-sized markets - a strategy the company believes is a differentiator in the intermodal marketplace. CSX also recently completed the first phase of double-stack clearances in its National Gateway initiative, which will create a more efficient rail route to link Mid-Atlantic ports with Midwestern markets. When the National Gateway is complete in 2015, the percentage of the company's intermodal traffic moving in double-stack lanes will be in the mid-90s.
To prepare for long-term growth, the company is building new terminals to expand its reach in markets such as central Florida, Pittsburgh and Montreal. In addition, the company continues to invest in existing terminals to further increase efficiency throughout its network, such as an expansion of its state-of-the-art Northwest Ohio hub, which opened in 2011 and has helped alleviate historic congestion in Chicago while opening up connectivity to markets in the Midwest.
Underscoring expectations for growth, Eliasson reaffirmed the company's long-term guidance for earnings per share, which are expected to grow over a two year period at an average rate of 10 to 15 percent through 2015 off the 2013 base, although that is more challenging in the near term given the coal environment. The company remains focused on sustaining an operating ratio in the high-60s by 2015, and the mid-60s longer-term.
CSX, based in Jacksonville, Florida, is a premier transportation company. It provides rail, intermodal and rail-to-truck transload services and solutions to customers across a broad array of markets, including energy, industrial, construction, agricultural, and consumer products. For more than 185 years, CSX has played a critical role in the nation's economic expansion and industrial development. Its network connects every major metropolitan area in the eastern United States, where nearly two-thirds of the nation's population resides. It also links more than 240 short-line railroads and more than 70 ocean, river and lake ports with major population centers and small farming towns alike. More information about CSX Corporation and its subsidiaries is available at www.csx.com. Like us on Facebook (http://www.facebook.com/OfficialCSX) and follow us on Twitter (http://twitter.com/CSX).