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CSX EARNINGS INCREASE 20 PERCENT

    RICHMOND, Va., July 27 /PRNewswire/ -- CSX Corporation (NYSE: CSX) today reported earnings of $154 million, $1.48 per share, in the second quarter of 1993, a 20 percent increase over comparable results for the prior-year quarter.  Excluding a productivity charge, the company would have reported earnings for the 1992 quarter of $128 million, $1.25 per share.(A)
    John W. Snow, chairman and chief executive officer of CSX, said: "These encouraging results illustrate the effectiveness of continued efforts by all of our units to drive down costs.  Improvements in the core earning power are reflected in significant reductions in the operating ratios of CSX Transportation, Sea-Land and CSX Intermodal and the ability of American Commercial Lines to perform well in light of the river conditions plaguing their industry this year.  Because of this success in controlling costs and stronger merchandise traffic levels at the rail unit, the company was able to overcome the adverse effects of a strike against key coal producers, continued weakness in the export coal market and the recurring flood conditions on the upper Mississippi."
    Total operating revenue for the second quarter increased 3 percent to $2.3 billion from 1992's $2.2 billion, while total operating expense, excluding the charge, increased 3 percent from 1992 to $2 billion. Operating income for the quarter was $278 million, a 9 percent increase over the comparable 1992 operating results of $254 million.
                       QUARTERLY SEGMENT RESULTS
    Rail Operating Income Improves 6 Percent
    Operating income at the company's rail unit increased 6 percent to $214 million from 1992's operating income of $201 million.(A)  Gains in merchandise traffic more than offset declines in coal traffic as operating revenue for the quarter increased 1 percent to $1.1 billion.
    Merchandise traffic levels, driven by strong improvements in the automotive, agricultural and metals markets, and moderate gains in other categories, rose 3 percent overall.  Merchandise revenue improved 5 percent, as a result of the increased traffic levels and the company's success in improving its traffic mix and yield.
    Reflecting the impact of lower export shipments, the ongoing United Mine Workers strike against certain mines served by the company's rail unit and lagging domestic utility traffic, coal originations declined 5 percent to 37.7 million tons vs. 39.6 million tons in the same quarter last year.  Weak foreign demand and a loss of export coal shipments due to the strike resulted in a 34 percent, 2.3 million ton, decrease in export coal volume.  Domestic utility traffic declined 2 percent in the quarter, or 600,000 tons, from the prior year, but shipments to other customers increased 1 million tons, or 14 percent.
    Rail operating expense in the quarter was $907 million, $5 million below the 1992 figure.  The improvement resulted from a substantial decline in rail labor and fringe expense, as well as the continued success of cost-control and expense-reduction programs.  Even with the adversity faced during the quarter, the unit reduced its operating ratio to 80.9 percent, 1 point below 1992's level.  While not impacting the second-quarter results, the company announced July 1 that three additional segments of its rail system had ratified a crew-consist agreement, raising to 88 percent the portion of its rail system operating with reduced crews.
    Container Shipping Records Substantial Improvement
    Container shipping's operating income improved 23 percent on a comparable basis to $54 million vs. $44 million in 1992, as a result of the unit's ongoing productivity improvements and expense-reduction programs.  Its operating ratio declined to 93.4 percent from 94.5 percent in the prior-year quarter.  Operating revenue improved 2 percent to $815 million, driven by gains in the Pacific and domestic trade lanes.  Operating expense ws? virtually flat, increasing less than 1 percent to $761 million from the comparable prior-year expense, while container volumes handled increased 3 percent.
    Snow said:  "These results are evidence of the vigorous actions Sea- Land has taken to improve substantially its earning power and return on investment.  We look forward to reporting further progress in Sea-Land's performance as the company moves forward with its benchmarking programs."
    Intermodal Records Another Successful Quarter
    CSX's intermodal unit reported operating income of $12 million, a 33 percent increase over the second quarter of 1992.  Operating revenue for the unit was $188 million vs. $181 million in the prior year as volume grew 4 percent as a result of strong domestic traffic.  The unit expects to continue to realize large gains in operating income as international shipping and domestic manufacturing companies rely increasingly on high-quality intermodal services.
    Barge Unit Experiences Severe Weather Problems
    Operating income from the barge unit declined $2 million to $12 million in the second quarter, as traffic was halted on the upper Mississippi for nearly a month due to flooding in early spring and again at the end of the quarter.  In addition, the unit continued to suffer from weak export coal shipments similar to those experienced by the company's rail unit.
    Flood conditions have persisted in July and are expected to curtail barge traffic from St. Louis north through August.  The company will use its best efforts to serve customers in this region despite these difficulties.  A rebound in traffic is anticipated once the river reopens and should result in strong fourth-quarter earnings.
    CSX's other income rose $27 million to $30 million in the quarter primarily as a result of the sale of a New Orleans hotel partnership interest and an increase in the installment gain on the earlier sale of track in south Florida.
    CSX interest expense increased $9 million from the same period last year due to a higher level of its short-term debt issued to increase cash reserves held in the event of a prolonged coal strike.  This expense increase was entirely offset by higher interest income.
                         SIX MONTHS RESULTS
    For the first six months of the year, the company reported earnings of $145 million, $1.39 per share, which includes a $61 million, 59 cents per share, restructuring charge recorded by the container-shipping unit in the first quarter of this year.  Exclusive of that charge, earnings for the first six months of 1993 would have been $206 million, $1.98 per share.  In the first half of 1992, the company reported a net loss of $260 million, $2.53 per share, reflecting the $450 million after-tax productivity charge at the rail unit.  Excluding the charge, first-half earnings for 1992 would have been $190 million, $1.85 per share.
    CSX Corporation, headquartered in Richmond, is an international transportation company offering a variety of rail, container-shipping, intermodal, trucking and barge services.
    FOOTNOTE (A):  On July 23, 1992, CSX Corporation reported that its results for the second quarter of 1992 included a labor-related productivity charge of $699 million, $450 million after tax, $4.38 per share. The $664 million rail portion of the charge principally recognized the additional costs of buying out trip-based compensation elements paid to train crew employees at CSX Transportation (CSXT).  Of the remaining charge, $17 million was recorded by the container-shipping unit and $18 million related to non-transportation operations.  In the second quarter of 1992, the company reported a net loss of $322 million, $3.13 per share, reflecting the labor-related productivity charge.
                  CSX CORPORATION AND SUBSIDIARIES
                 Consolidated Statement of Earnings
           (Millions of Dollars, Except Per Share Amounts)
                                     Quarter Ended     Six Months Ended
                                        June 30,           June 30,
                                     1993      1992     1993     1992
    Operating Revenue
     Transportation                 $ 2,221   $2,145    $4,329   $4,210
     Non-Transportation                  43       44        58       65
      Total                           2,264    2,189     4,387    4,275
    Operating Expense
     Transportation                   1,952    1,901     3,899    3,805
     Non-Transportation                  34       34        54       59
     Productivity/Restructuring Charge  ---      699        93      699
      Total                           1,986    2,634     4,046    4,563
    Operating Income (Loss)             278     (445)      341     (288)
    Other Income                         30        3        29        7
    Interest Expense                     75       66       149      134
    Earnings (Loss) Before
     Income Taxes                       233     (508)      221     (415)
    Income Tax Expense (Benefit)         79     (186)       76     (155)
    Net Earnings (Loss)             $   154    $(322)   $  145  $  (260)
    Earnings (Loss) Per Share       $  1.48   $(3.13)   $ 1.39  $ (2.53)
    Average Common Shares Outstanding
     (Thousands)                    103,905  102,883   103,785   102,743
    Common Shares Outstanding at
     End of Period (Thousands)      103,972  102,914   103,972   102,914
    Cash Dividends Paid
     Per Common Share               $  0.38   $ 0.38    $ 0.76   $  0.76
    See accompanying Notes to Consolidated Financial Statements.
                    CSX CORPORATION AND SUBSIDIARIES
                  Consolidated Statement of Cash Flows
                         (Millions of Dollars)
                                                      Six Months Ended
                                                           June 30,
                                                       1993       1992
    Operating Activities
     Net Earnings (Loss)                               $145      $(260)
     Adjustments to Reconcile Earnings
       to Cash Provided
      Depreciation                                      286        264
      Deferred Income Taxes                              42       (106)
      Productivity/Restructuring Charge-Provision        93        699
      Productivity/Restructuring Charge-Payments        (66)      (181)
      Other Operating Activities                        (27)       (19)
      Changes in Operating Assets and Liabilities
       Accounts Receivable                              (30)        83
       Materials and Supplies                           (21)       (25)
       Other Current Assets                             (20)        36
       Accounts Payable and Other Current Liabilities   (49)      (155)
      Cash Provided by Operating Activities             353        336
    Investing Activities
     Property Additions                                (326)      (413)
     Purchases of Marketable Securities                (100)       ---
     Proceeds from Property Dispositions                 28         23
     Short-Term Investments - Net                       (33)       112
     Other Investing Activities                          38        ---
      Cash Used by Investing Activities                (393)      (278)
    Financing Activities
     Short-Term Debt - Net                              204       (114)
     Long-Term Debt Issued                               81        256
     Long-Term Debt Repaid                             (143)      (114)
     Cash Dividends Paid                                (79)       (78)
     Other Financing Activities                           1         31
      Cash Provided (Used) by Financing Activities       64        (19)
    Cash, Cash Equivalents and Short-Term Investments
     Increase in Cash and Cash Equivalents               24         39
     Cash and Cash Equivalents at Beginning of Period   374        290
      Cash and Cash Equivalents at End of Period        398        329
     Short-Term Investments at End of Period            189         52
      Cash, Cash Equivalents and Short-Term
       Investments at End of Period                   $ 587      $ 381
    See accompanying Notes to Consolidated Financial Statements.
                      CSX CORPORATION AND SUBSIDIARIES
                Consolidated Statement of Financial Position
                          (Millions of Dollars)
                                                  June 30,    Dec. 31,
                                                    1993        1992
    Assets
     Current Assets
      Cash, Cash Equivalents and
       Short-Term Investments                    $   587      $   530
      Accounts Receivable                            652          605
      Materials and Supplies                         210          189
      Deferred Income Taxes                          174          ---
      Other Current Assets                           117           97
       Total Current Assets                        1,740        1,421
     Properties and Other Assets
      Properties                                  15,794       15,702
      Less Accumulated Depreciation                5,134        5,066
       Properties -- Ne                           10,660       10,636
      Affiliates and Other Companies                 246          264
      Other Assets                                   791          728
       Total Properties and Other Assets          11,697       11,628
       Total Assets                              $13,437      $13,049
    Liabilities and Shareholders' Equity
     Current Liabilities
      Accounts Payable and
       Other Current Liabilities                 $ 2,063      $ 2,066
       Current Maturities of Long-Term Debt          204          200
       Short-Term Debt                               218           14
        Total Current Liabilities                  2,485        2,280
       Long-Term Debt                              3,181        3,245
       Long-Term Liabilities and Deferred Gains    2,405        2,467
       Deferred Income Taxes                       2,299        2,082
       Shareholders' Equity
        Common Stock                                 104          103
        Other Capital                              1,275        1,250
        Retained Earnings                          1,688        1,622
         Total Shareholders' Equity                3,067        2,975
         Total Liabilities and
          Shareholders' Equity                   $13,437      $13,049
    See accompanying Notes to Consolidated Financial Statements
    Notes to Consolidated Financial Statements
    (1) The company recorded a $93 million pretax charge in the first quarter of 1993 to recognize costs of restructuring certain operations and functions at its container-shipping unit.  The restructuring charge reduced net earnings for the first six months of 1993 by $61 million, 59 cents per share.
    In the fourth quarter of 1991, the company recorded a charge to provide for the estimated costs of implementing work-force reductions, improvements in productivity and other cost reductions at its major transportation units. The charge amounted to $755 million on a pretax basis and reduced 1991 net earnings by $490 million, $4.88 per share. In the second quarter of 1992, the company recorded a charge principally to recognize the estimated additional costs of buying out certain trip- based compensation elements paid to train crew employees. The additional pretax charge amounted to $699 million and reduced net earnings for the second quarter and first six months of 1992 by $450 million, $4.38 per share.
    (2) Effective Jan. 1, 1993, the company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." SFAS No. 109 superseded SFAS No. 96, "Accounting for Income Taxes," which the company adopted effective Jan. 1, 1987. Net earnings
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Date:Jul 27, 1993
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