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Jax Daily Record Thursday, Apr. 22, 202105:10 AM EST

After years of cuts, CSX adding train staff

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Earnings for the Jacksonville-based railroad giant dipped in Q1, but it forecasts big revenue growth for the rest of the year.
by: Mark Basch Contributing Writer

CSX Corp. reported lower first-quarter earnings and revenue April 20 as harsh winter weather affected the railroad’s rebound from the COVID-19 pandemic.

However, the Jacksonville-based company is projecting big revenue growth for the rest of the year and is expecting to increase its train staff after years of job cuts.

“We are adding head count in the second quarter in preparation for the expected volume growth,” CEO James Foote said in CSX’s quarterly conference call with analysts.

CSX ended the first quarter with 19,184 employees across its network, which covers most of the Eastern U.S.

That was 1,271 fewer employees than it had a year earlier and about 8,000 lower than it was at the beginning of 2017, when new management came in and began restructuring operations. But the head count was about unchanged from the fourth quarter of 2020.

Executive Vice President of Operations Jamie Boychuk said the company expects to add 400 to 500 employees this year.

“We’re going to hit that, I would say, as we enter into the second half and we’ll continue to hire if we see the business levels come to the point that we think they will,” Boychuk said.

CSX reported first-quarter earnings of 93 cents a share, down from $1 in the first quarter of 2020, with revenue falling 1% to $2.813 billion.

Foote said the company expects a big rebound in business the rest of this year.

“We entered the year projecting volume growth in excess of GDP and still expect to achieve this target,” he said.

“We will continue to attract demand throughout the year and based on the combination of the strengthening economic outlook and our focus on converting additional volumes off the highway, we now expect to achieve double-digit full year revenue growth.”

While CSX is preparing for growth, an easing of the pandemic is helping its hiring process, Foote said.

“With fewer recent COVID cases across the network, we are able to increase the number of in-person interactions and training sessions,” he said.

“We’ve been at this since the beginning of the year and have been running people through their classes, which we couldn’t do before because of the social distancing issues,” he said. The company is “now getting them out into the field.”

Foote said several measures of efficiency for the railroad show productivity is improving as it hires more workers.

“Any way you look at the data, we have dramatically transformed how CSX operates, which has created the capacity to absorb significant growth for years to come,” he said.

“We remain focused on driving the network back to record performance levels, as well as realizing the incremental efficiency benefits this will provide.”

J&J Vision grows its sales 7.3%

Much of the world’s attention on Johnson & Johnson these days focuses on its COVID-19 vaccine.

However, as the medical products giant reported first-quarter earnings April 20, it focused on a wide range of businesses including sales growth at its Jacksonville-based contact lens subsidiary.

Johnson & Johnson Vision reported total sales in the quarter rose 7.3% to $1.145 billion, with contact lens sales increasing 5.3% to $857 million.

Sales of vision surgical products jumped 13.7% in the quarter, helped by pent-up demand after some procedures were delayed last year because of the pandemic.

“We think our vision care, our contact lens business, is in very good shape,” CEO Alex Gorsky said in Johnson & Johnson’s conference call.

“We think our share position is stable to increasing and we think we’ve seen, definitely, an improving position in our vision surgery business, part of that being comps (sales compared to last year) but also part of it due to new innovation launches,” he said.

Company officials said its contact lens business in Jacksonville continues to unveil new products, including a therapeutic contact lens to manage the progression of myopia in children.

Johnson & Johnson Vision is working on that lens in a collaboration with a lens manufacturer called Menicon and expects “commercialization of this product by the end of 2021 under the brand name Acuvue Ability, pending health authority approval,” Chief Financial Officer Joseph Wolk said.

“We believe that our lineup for new lenses, whether it’s our anti-allergy lens or multifocal and contact lenses, and the improvement that we’re seeing in our surgery business will continue to bear out in stronger performance and share gains through the year,” Gorsky said.

GEE Group gets $45M in stock sale

GEE Group Inc. closed the sale of 83.3 million shares of stock at 60 cents each on April 19, raising cash to pay off debt but significantly increasing its shares outstanding.

The Jacksonville-based staffing company estimated in a Securities and Exchange Commission filing that its net proceeds from the sale would be $45.5 million.

The filing said the sale increases the amount of shares outstanding to almost 106 million.

The latest filing gives no indication of its shareholder base after the sale.

Its 2020 annual report showed officers and directors of the company owned 16.7% of the stock but there were no other significant shareholders before the recent stock sale.

Sabby Management, a New Jersey-based fund manager, said in an April 19 SEC filing it acquired 10 million GEE Group shares, or 9.9% of the stock.

GEE Group’s market price has dropped since it first filed plans March 12 to sell the large number of shares. Its closing price March 11 was $1.81.

The stock closed at 85 cents  April 14 before the company announced the new shares would be sold at 60 cents each.

Analyst likes Rayonier AM deal

Rayonier Advanced Materials Inc.’s deal last week to sell off its Canadian lumber and newsprint assets disappointed some investors, but Berenberg Capital Markets analyst Paretosh Misra took a positive view.

Jacksonville-based Rayonier AM is selling those mills to focus on its core cellulose specialties products.

“Investors bullish on lumber pricing were likely disappointed,” Misra said in his research note.

“Lumber prices have rallied significantly in the last 12 months and we think it is possible some investors wanted the company to maintain exposure to the commodity,” he said.

“We, however, have a different view - we believe debt reduction should be viewed favorably by investors who have been avoiding the stock because of high leverage,” he said.

“Further, once the dust settles, the company’s increased focus on its cellulose business, which we see as higher quality and less cyclical than the assets being sold, should lead to a higher trading multiple for the stock.”

Rayonier announced the agreement April 12 to sell six lumber mills and one newsprint mill in Canada to Vancouver-based GreenFirst Forest Products Inc. for $214 million.

Tapestry names Coach CEO

Tapestry Inc. said last week that Todd Kahn, who had been serving as interim CEO of its Coach division, was named permanent CEO of the handbag and accessories business.

Kahn had been running the Coach brand since his predecessor resigned in March 2020 and he was named interim CEO for Coach in July.

Since 2016, Kahn has been president of parent company Tapestry, which also owns the Kate Spade and Stuart Weitzman brands.

New York-based Tapestry handles all North American distribution for Coach from a warehouse in Jacksonville International Tradeport.

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