CSX Corp. on Tuesday reported higher-than-expected fourth-quarter earnings, with new CEO James Foote emphasizing he is continuing to follow the operating plans started by his late predecessor, Hunter Harrison.
“Hunter was a true legend and CSX would not be in the position it is today without the tremendous changes he was able to make in his time here,” Foote said in a conference call with analysts.
Foote was promoted to CEO after Harrison died a month ago. To emphasize his commitment to continuing Harrison’s plans, Foote said his first move after becoming CEO was to order the bulldozing of a rail yard closed down by Harrison.
“The Atlanta hump yard today is flat. There is no turning back,” Foote said.
A hump yard is a rail yard on a hill where boxcars are sorted.
Jacksonville-based CSX reported adjusted earnings of 64 cents a share for the fourth quarter, up from 49 cents the previous year and better than analysts’ forecasts, which ranged from 54 cents to 58 cents, according to Yahoo Finance.
Revenue fell 6 percent from the previous year to $2.86 billion, but the company said that was due to an extra week in fiscal 2016.
CSX’s adjusted operating ratio in the fourth quarter was 64.8 percent, down from 67 percent in the final quarter of 2016.
Operating ratio — expenses divided by revenue — is a key metric of the railroad company’s performance, and analysts expected Harrison to aggressively lower CSX’s ratio.
Foote said he expects the company to “deliver the results Hunter thought we would” on operating efficiencies.
Total employment at the end of the year was 24,006, down from 27,288 at the end of 2016.
CSX’s final net income for the fourth quarter reached $4.62 a share, due to a huge one-time tax reform benefit resulting from the new federal income tax law enacted in December.
CSX’s stock fell $1.12 to $58.13 Tuesday, but its earnings report was released after the market had closed.