CSX Corp Keeps 2015 Earnings Growth Forecast Unchanged - Analyst Blog

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Transportation company CSX Corp.CSX reiterated its expectation of double digit growth in its earnings per share for full year 2015, despite conditions being rather challenging. Moreover, the company projects strong earnings growth in the first quarter of 2015 as well. Volume growth is estimated to be around 3% in the first quarter.

CSX Corp.'s Chief Financial Officer, Fredrik Eliasson cited these estimates at the JPMorgan Aviation, Transportation & Industrials conference for 2015. He also stated that management anticipates at least a 5% decline in its domestic coal shipments in 2015.

The weak projection for domestic coal shipments takes into account the extreme climatic conditions experienced this winter and soft natural gas prices currently prevalent in the U.S. Furthermore, declining crude oil prices have also resulted in the company toning down its projection for crude oil shipments which is expected to display moderate growth compared to original expectations. Nevertheless, the company has maintained its earnings growth projection for 2015 despite the anticipated decline in coal movements, buoyed by favorable pricing and volume growth in the intermodal and merchandise divisions. Moreover, increased efficiencies in operations also support the company's bottom-line growth outlook for 2015.

The company, in fact, expects growth at its intermodal and merchandise units to outpace the broader market in 2015. It also hopes to benefit in the long term as freight demand in the country is estimated to grow in excess of 50% by 2040. Moreover, the rail industry is expected to benefit from the challenges confronting the trucking industry.

Zacks Rank

CSX Corp. presently carries a Zacks Rank #3 (Hold). Better-ranked transportation stocks include Covenant Transportation Group, Inc. CVTI , Knight Transportation Inc KNX and Celadon Group Inc CGI . All the three stocks carry a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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