CSX profit drops 27% as railroad shipments decline amid construction
projects and flooding
[April 17, 2025] By
JOSH FUNK
OMAHA, Neb. (AP) — CSX railroad's profit fell 27% in the first quarter
as two major construction projects forced them to reroute some trains
and constrained its response to flooding and other weather challenges,
curtailing shipments.
The Jacksonville, Florida-based railroad said it earned $646 million net
income, or 34 cents per share, during the quarter. That's down from $880
million, or 45 cents per share, a year ago, and the results fell short
of Wall Street expectations.
The analysts surveyed by FactSet Research predicted CSX would earn 37
cents a share.
CEO Joe Hinrichs said the quarter was disappointing but the railroad is
committed to improving its performance. And even with the delayed and
missed shipments Hinrichs said shippers still gave the railroad good
marks on a customer service survey because CSX worked to keep them
updated on problems.
CSX is in the middle of expanding a key tunnel in Baltimore, so it will
be able to carry double-stacked shipping containers, and the railroad is
completing repairs related to Hurricanes Helene and Milton. Both those
projects are scheduled to wrap up in the fourth quarter of this year, so
the railroad will be constrained until then.
Edward Jones analyst Jeff Windau said CSX lost the flexibility it
normally uses to respond to weather disruptions because of the
construction projects.
Hinrichs said that right now two of CSX's main north-south routes are
closed on the East Coast so it had to shift traffic over to the central
and western parts of its network, which are now crowded. Then when
customers weren't getting their empty rail cars returned on time because
of the delays they added additional cars and added to the congestion.
“The resiliency of our network has been diminished because we lost some
routes,” Hinrichs said in an interview with The Associated Press. Later
he added “The shocks are what we are having trouble responding to.”
[to top of second column] |
A CSX train engine sits idle on tracks in Philadelphia, Sept. 14,
2022. (AP Photo/Matt Rourke, File)
 Hinrichs said he still expects
volume to increase overall this year, but it's hard to predict how
much because of all the uncertainty about trade policy. But right
now demand is still holding steady across most sectors while
companies wait to see which tariffs are going to stick.
President Donald Trump's trade war could lead to a drop in shipments
of imported goods, but so far the railroad said demand remains
fairly steady. And in the long run, CSX could benefit from the
expected increase in U.S. manufacturing because the railroad will
haul raw materials and finished products for those factories.
But during this first quarter, deliveries of shipping containers
actually grew 2% as some companies tried to get more of their
shipments ahead of Trump's tariffs.
CSX said the total volume of shipments it delivered slipped 1%, and
revenue dropped 7% to $3.42 billion as coal and fuel surcharge
revenue fell. That also came in lower than the $3.45 billion that
analysts expected.
CSX and the other eastern railroad, Norfolk Southern, could also
benefit long term if more of the country's exports shift from China
toward Europe and India because those destinations would be served
through East Coast ports. Currently, Trump has maintained high
tariffs on China, which responded in kind, but he gave the rest of
the world a 90-day reprieve to allow time to negotiate new trade
deals.
CSX is one of the nation's largest railroads with tracks
crisscrossing the Eastern United States.
All contents © copyright 2025 Associated Press. All rights reserved |
