CSX Corporation reported fourth quarter 2007 net earnings of $365 million, or 86 cents per share, including a penny per share from insurance gains. In the fourth quarter of last year, the company reported earnings of $347 million, or 75 cents per share, including 18 cents per share from insurance gains, a gain on Conrail property and the resolution of certain tax matters. On a reported basis, earnings per share increased 15% percent on a year-over- year basis.
“Once again, CSX delivered outstanding financial gains for our shareholders through strong improvements in safety, service and productivity,” said Michael Ward, chairman, president and CEO. “These improvements reflect the value we are delivering for our customers, the continued momentum in our business and the strong fundamentals of our industry in an evolving transportation marketplace.”
The company’s Surface Transportation businesses produced record fourth quarter operating income of $609 million versus $505 million in the same quarter last year. These results included insurance gains of $8 million and $27 million, respectively. On a comparable basis, excluding the insurance gains, operating income rose 26 percent on a year-over-year basis. (See table below for reconciliation of quarter items to reported numbers.)
The significant increase in operating income resulted from strong revenue growth and productivity improvements that allowed CSX to overcome the impact of higher fuel prices. In addition, the sustained improvements in the company’s safety record resulted in a favorable personal injury reserve adjustment for the quarter.
CSX reported full-year 2007 earnings per share of $2.99, including 29 cents per share from discontinued operations and insurance gains. In 2006, the company reported full-year earnings per share of $2.82, including 60 cents from insurance gains, a gain on Conrail property and the resolution of certain tax matters. On a comparable basis, excluding these items, earnings per share increased 22 percent on a year-over-year basis. Earnings growth in 2007 was supported by Surface Transportation revenues that exceeded $10 billion for the first time in the company’s history, and record Surface Transportation operating income of more than $2.2 billion. The company’s operating ratio for the full year improved to its best level in a decade.
“By nearly every measure of safety, customer service and financial performance, CSX is the fastest-improving company in an attractive rail industry. In fact, we now rank among the industry’s best companies in safety and service,” said Ward. “Our performance has generated significant shareholder value and has led to the highest share price gain of any major North American railroad in the past three years.”
With momentum in the company’s performance, a strong outlook for rail transportation, and the benefits of key investments in its network, management today reaffirmed its long-term financial targets, which include double-digit growth in operating income and earnings per share, as well as a mid- to low 70’s operating ratio and free cash flow before dividends of $800 million to $1 billion by 2010.
“Our employees are continually raising the bar and creating shareholder value in both the short-term and long-term while meeting the nation’s pressing transportation needs in ways that are good for the environment and the economy,” said Ward. (PRNewswire-FirstCall)