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Hunter Harrison leads CSX to 2nd quarter 8pc revenue gain from 12pc loss
JACKSONVILLE Class I railway CSX declared a 14 per cent year-on-year second quarter net profit increase to US$510 million, drawn on revenues of $2.93 billion, up eight per cent.
This is a big quarter for CSX because it is the first quarter that the company has been led by the railway's controversial and expensive CEO Hunter Harrison, aged 73, who as served as chief executive at the Canadian Pacific and Canadian National.
CSX investors endorsed a massive pay package - $84 million - to bring Mr Harrison on board as CEO. This was his first, this latest second quarter, at the helm in which he produced a profit that "significantly exceeded" analysts' already high expectations, said Bloomberg.
Restructuring cost 1,000 people their jobs, ended nap breaks, and also produced $90 million in efficiency gains. Closing some CSX hump yards operations saved money too.
"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," said Mr Harrison's press release accompanying the results.
"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.
The revenue increase, which contrasts to the 12 per cent drop in the second quarter of 2016, was a attributed to growth across nearly all markets, largely driven by coal and greater volumes in other sectors.
"In the second quarter, CSX delivered improved asset utilisation, cost control and fuel optimisation. These operational improvements, coupled with the benefits from the management restructuring that was completed early in the second quarter, drove $90 million in efficiency gains. These gains more than offset the cost of inflation in the quarter.
CSX said it now expects to drive earnings per share growth of around 25 per cent off the 2016 reported base of $1.81.
As a result, the board authorised an additional $500 million for the current share repurchase programme, which now totals $1.5 billion, said the company statement.
CSX connects every major metropolitan area in the eastern United States, where nearly two-thirds of the nation's population resides. It also links more than 240 short-line railways and more than 70 ocean, river and lake ports with major population centres and farming towns.
This is a big quarter for CSX because it is the first quarter that the company has been led by the railway's controversial and expensive CEO Hunter Harrison, aged 73, who as served as chief executive at the Canadian Pacific and Canadian National.
CSX investors endorsed a massive pay package - $84 million - to bring Mr Harrison on board as CEO. This was his first, this latest second quarter, at the helm in which he produced a profit that "significantly exceeded" analysts' already high expectations, said Bloomberg.
Restructuring cost 1,000 people their jobs, ended nap breaks, and also produced $90 million in efficiency gains. Closing some CSX hump yards operations saved money too.
"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," said Mr Harrison's press release accompanying the results.
"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.
The revenue increase, which contrasts to the 12 per cent drop in the second quarter of 2016, was a attributed to growth across nearly all markets, largely driven by coal and greater volumes in other sectors.
"In the second quarter, CSX delivered improved asset utilisation, cost control and fuel optimisation. These operational improvements, coupled with the benefits from the management restructuring that was completed early in the second quarter, drove $90 million in efficiency gains. These gains more than offset the cost of inflation in the quarter.
CSX said it now expects to drive earnings per share growth of around 25 per cent off the 2016 reported base of $1.81.
As a result, the board authorised an additional $500 million for the current share repurchase programme, which now totals $1.5 billion, said the company statement.
CSX connects every major metropolitan area in the eastern United States, where nearly two-thirds of the nation's population resides. It also links more than 240 short-line railways and more than 70 ocean, river and lake ports with major population centres and farming towns.
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