CSX Corp. on Tuesday reported third-quarter earnings which “some could characterize as mixed results,” CEO Hunter Harrison said.
However, Harrison told analysts in a conference call that the well-documented service issues that plagued the company during the summer are behind the Jacksonville-based railroad company.
“I think the organization is ready to go forward at what I might describe as breakneck speed,” he said.
CSX reported earnings of 51 cents a share for the quarter, 3 cents higher than last year and matching the average forecast of analysts, according to Yahoo Finance.
Revenue rose 1 percent to $2.74 billion, slightly below the average forecast of $2.77 billion.
Harrison joined CSX in March and immediately began implementing changes in the company’s operations to improve efficiency, including large job cuts.
Chief Financial Officer Frank Lonegro said during the call the company cut 3,000 full-time jobs this year, 300 more than he said had been cut during an investor conference a month ago. Those include cuts made before Harrison was hired.
Lonegro said another 500 jobs could be lost by the end of the year.
Total employment at CSX, which operates throughout the eastern U.S., was 24,388 in September.
In addition to the 3,000 full-time jobs, 1,000 contractor positions have been cut, Lonegro said.
As Harrison overhauled operations, CSX and federal transportation regulators have heard numerous complaints from freight customers about service disruptions on the railroad.
“We went through, obviously, some slippage servicewise in the third quarter, which we were not proud of,” Harrison said.
But he said CSX has learned its lesson and improved service.
“Those issues, generally speaking, are behind us,” Harrison said.
“This company is back to where it was, and it’s better and it’s climbing,” he said.
Harrison has successfully implemented his operating model, called Precision Scheduled Railroading, at previous jobs, and he is confident it will succeed over the long term in improving CSX operations.
“This (the service issues) was not a failure of the model,” he said.
“I think as we reflect, it was more of an execution issue. We didn't execute at a lot of levels.”
Harrison has said “resistance to change” by some workers was a major factor in the service disruptions, but he said Tuesday he wasn’t trying to blame anyone in particular.
“I'm not pointing any fingers,” he said.
“Collectively as a team, we didn't get the job done.”
CSX experienced two train derailments in the third quarter, including one in South Carolina in August caused by “sabotage,” Harrison said Tuesday.
The Associated Press reported investigators determined the train struck a bulldozer that someone intentionally left on the track.
“We’ve got rewards out,” Harrison said.
While “there's been a lot of noise” around the company this year, Harrison thinks investors will be happy with what they see from CSX at the end of 2017.
“The long story is exciting if you're sitting there on the edge of your seat, waiting for fourth-quarter results. You might fall off your chair before it's over.