) forecasts weather challenges to dampen earnings growth in the
coming quarters. The impact would slow down its operations and
shrink volumes, resulting in earnings per share (EPS) of 10 cents
in the first quarter of 2014. In addition, the company
expects modest growth in full-year earnings compared to its
In the recent past, CSX's financials suffered a setback due to
the lower coal demand. However, it expects coal demand from power
plants to gradually improve as inventories are returning to
normal levels from an excess. Despite modest earnings expectation
for this year, the company expects to gradually improve its
performance in 2015 and return to its target of double-digit EPS
growth of 10% to 15%.
The company expects this growth to be driven by its strategic
investments in rail infrastructure and growth in intermodal
services. CSX Corp. continues to invest in expanding network and
terminal capacity, and enhancing safety, service and reliability
for its customers as well as gain a competitive advantage over
the likes of
Norfolk Southern Corp.
Kansas City Southern
The company expects capital investment of $2.3 billion for
2014. For 2013, CSX will utilize a portion of its capital for the
maintenance of its core infrastructure, while the balance will be
assigned to locomotives, freight cars and high return
The company is focused on enhancing the capacity of the
intermodal terminals and expansion of tracks along the River Line
between northern New Jersey and the Albany, N.Y. Further, 90% of
its intermodal traffic is moving in double stacking lane, which
is expected to grow even further on network investments in the
Virginia Avenue Tunnel clearance project in Washington DC.
CSX Corp. also expects operating ratio in the high 60s level
for 2015, which looks achievable in the present market scenario.
Over the long term, the company expects operating ratios to
improve to the mid 60s range.
CSX Corp. currently has a Zacks Rank #4 (Sell)
Better-ranked stocks in this sector include
Union Pacific Corp.
), which has a Zacks Rank #2 (Buy).
CSX CORP (CSX): Free Stock Analysis Report
KANSAS CITY SOU (KSU): Free Stock Analysis
NORFOLK SOUTHRN (NSC): Free Stock Analysis
UNION PAC CORP (UNP): Free Stock Analysis
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