CSX Corp. on Tuesday reported higher-than-expected second-quarter earnings as new CEO Hunter Harrison began implementing his plans to make the Jacksonville-based railroad run more efficiently.
Adjusted earnings of 64 cents a share were 17 cents higher than the second quarter of 2016 and above analysts’ forecasts, which ranged from 53 cents to 62 cents, according to Yahoo Finance.
CSX said $122 million in restructuring charges reduced final earnings to 55 cents a share for the quarter.
The charges included an $84 million payment to Harrison as reimbursement for compensation he forfeited when he left his previous job at Canadian Pacific Railway Ltd. Harrison threatened to quit if CSX didn’t pay that money.
The restructuring charges also included severance and other costs as CSX cut 951 management-level employees in the first and second quarter, a program which began before Harrison joined the company in March.
Data filed with the U.S. Surface Transportation Board shows CSX has reduced overall employment by about 1,400 so far this year, bringing total employment throughout its system to 23,098 in June.
As Harrison works on his program called Precision Scheduled Railroading to make CSX more efficient, the company reduced its operating ratio (expenses divided by revenue) from 68.9 percent in the second quarter of 2016 to 63.2 percent, excluding the restructuring costs.
“We are implementing Precision Scheduled Railroading on an expedited timetable, converting switching operations, balancing the network, streamlining resources and getting more out of our assets,” Harrison said in a news release.
“Although there still remains a lot to be done, we are confident that these initiatives will drive improved customer service, greater resource efficiency and superior shareholder value,” he said.
Second-quarter revenue rose 8 percent to $2.93 billion, helped by a 27 percent jump in coal revenue.
That beat the average analysts’ forecast of $2.85 billion, according to Yahoo.
CSX’s earnings report came after the stock market closed Tuesday.