CSX Corp. reported flat revenue growth in the first quarter and the Jacksonville-based railroad company is facing additional challenges in the second quarter from the Port of Baltimore closing.
However, CSX is still projecting revenue growth by a low to mid single-digit percentage this year.
“Once we get the Baltimore situation resolved we still see strong demand for export coal,” CEO Joe Hinrichs said in an April 18 interview after CSX’s first-quarter earnings report.
Hinrichs said the company is seeing increased freight traffic in categories including automotive, chemicals and forest products, which should lift revenue.
The March 26 collapse of the Francis Scott Key Bridge in Baltimore, which temporarily closed the port, is costing CSX $25 million to $30 million a month in lost revenue from its export coal business, the company said in its quarterly report.
The port is expected to reopen in late May and operations should return to normal a week or two after that, Hinrichs said.
“We’re hoping to do better, but that’s the target,” he said.
The port closing has not had a big financial impact on other freight categories because CSX was able to relocate shipments to other ports. The company operates a major coal terminal along Chesapeake Bay to send shipments overseas.
“There aren’t many options of where to export coal from,” Hinrichs said.
Revenue falls 1%
CSX reported first quarter revenue of $3.68 billion, 1% lower than the first quarter of 2023.
Earnings of 46 cents a share were 2 cents lower than last year but a penny higher than the fourth quarter of 2023.
“We’re very pleased with the sequential momentum we have,” Hinrichs said.
“We’re expecting to do the same in the second quarter despite some of the issues in Baltimore.”
Metrics slip
CSX reported a decline in some of its service metrics in the first quarter. For example, on-time arrivals fell from 77% a year earlier to 70%.
Hinrichs said that was mainly the result of maintenance on some of CSX’s tracks late in the first quarter, which causes trains to slow down as they travel through work areas.
“That will clear itself out as we get through the spring,” he said.
“We still believe we have industry-leading service metrics,” he said. “Customers are very happy with the service they’re getting from CSX.”