Leading rail transportation company
CSX Corporation
(
CSX
) has come out with its 2011 Corporate Social Responsibility (CSR)
report. The report highlights the company's performance based on
various operational, environmental, social and financial
aspects.
The CSR reports projects CSX Corp's role as a significant
contributor to the economy, generating substantial employment
opportunities and building infrastructure through intensive capital
investments. In 2011, CSX Corp. hired approximately 4,000
employees with plans to recruit an additional 3,000 this
year.
The company invested approximately $2.2 billion last year and
intends to spend approximately $2.25 billion this year. The report
also highlights the operational efficiency achieved by the company
last year with record-low operating ratio of 70.9%.
Further, the CSR report reflects the company's achievements in
protecting the environment. It states that CSX Corp. was successful
in bringing its greenhouse gas emissions intensity down by 8% from
the 2006 level and currently targets a 6% reduction by 2020.
We believe that the CSR report remains beneficial for
shareholders, customers, employees and other associated parties of
CSX Corp. The report underpins major functional areas of the
company and presents its financial capabilities and social
responsibilities for the long term.
We also believe that favorable rail industry pricing, fuel
recoveries and operational improvement will aid the company's
top-line growth and drive earnings going forward. The company
reaffirmed its earnings per share growth target of 20% till 2015.
Further, we believe that through improved cost-control measures and
service levels, CSX can achieve its long-term operating ratio
target of 65% within 2015.
However, we remain cautious on CSX Corp. given the declines in
coal volumes, which constitute a significant part of its business.
Further, the company's capital intensive nature, unionized
workforce, increased competition from major railroads like
Norfolk Southern Corp.
(
NSC
) as well as strict railroad regulations keep us on the
sidelines.
We maintain our long-term Neutral rating on CSX Corporation. For
the short-term (1-3 months) the stock holds a Zacks #2 Rank
(Buy).
CSX CORP (CSX): Free Stock Analysis Report
NORFOLK SOUTHRN (NSC): Free Stock Analysis
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