CSX Corp. reported slightly lower fourth-quarter revenue, but CEO James Foote expressed optimism that conditions will improve this year.
“We expect to return to growth in 2021 for both CSX and the U.S. economy,” Foote said in a Jan. 21 conference call with analysts.
“While much debate remains around the pace of this growth as we’ve transitioned from COVID headwinds to potential stimulus tailwinds, we believe CSX is well positioned to grow volumes faster than the prevailing GDP growth rate in 2021,” he said.
The Jacksonville-based railroad company reported fourth-quarter revenue fell 2% to $2.825 billion, and revenue for the full year dropped 11% to $10.583 billion, as the pandemic slowed freight traffic in the spring of 2020.
Fourth-quarter earnings of 99 cents a share were even with the fourth quarter of 2019, but earnings for all of 2020 fell by 57 cents a share to $3.60.
CSX has continued to reduce expenses as freight volumes fell. Its operating ratio (operating expenses divided by revenue) fell to 57% in the fourth quarter, from 60% the previous year.
The expense cuts included a reduction in jobs. CSX’s employee count fell by 1,626 during 2020 to 19,282 at the end of the year.
CSX has sharply cut its head count since a new management team took over in March 2017. Total employment was about 27,000 at the end of 2016.
Chief Financial Officer Kevin Boone said in the conference call that CSX may be increasing its head count this year.
“We continue to focus on crew availability and are currently accelerating our first-half hiring efforts to be prepared in the event of stronger demand,” Boone said.
“We expect head count will likely exceed attrition in the first half of the year to provide flexibility should demand surprise positively, particularly in the second half. We will manage it closely and adjust accordingly, as we monitor the trajectory of the potential volume recovery,” he said.
