OMAHA, Neb. (AP) — CSX railroad's fourth-quarter profit jumped 23% even though volume slipped amid the ongoing supply chain challenges.
The Jacksonville, Florida-based railroad said Thursday it earned $934 million, or 42 cents per share. That's up from $760 million, or 33 cents per share, a year earlier.
CSX said the number of shipments it delivered declined 2% as auto production remained weak because of the shortage of computer chips, but demand for most industrial shipments remained strong and the railroad delivered nearly the same number of containers of imported goods as it did the previous year.
The results beat Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 41 cents per share.
The freight railroad said its revenue grew 21% to $3.43 billion in the quarter as CSX increased prices and collected more fuel surcharges. That also beat the Street forecasts for $3.3 billion revenue.
CSX said its expenses surged 28% to $2.06 billion in the quarter as fuel and labor costs jumped. Edward Jones analyst Jeff Windau said those higher expenses dragged profits down, but the railroad was able to offset them with price increases.
The economy remains strong, so Windau said the demand for more shipments is there if the railroads and all the other parts of the supply chain can handle them.
CSX continues to struggle with having a significant number of workers off because of COVID-19 — particularly in recent weeks as the highly contagious omicron variant spread — and hiring has been slower than the railroad would like. CEO Jim Foote said the number of sick workers also continues to be a problem at ports and warehouses.
“I think it’s safe to say that things might be getting a little bit better, but everything is still challenged to a large degree right now because there’s so many people that are off sick,” Foote said. “Our case numbers are way up, so there’s still a big problem with having a consistent supply of workforce here.”
CSX said it expects volume to grow faster than the gross domestic product in 2022 with the number of shipments steadily improving throughout the year as the supply chain problems get resolved.
CSX Corp. is one of the nation’s largest railroads, and it operates more than 21,000 miles (34,000 kilometers) of track in 23 Eastern states and two Canadian provinces. Shares of the company slipped about 2.4% in extended trading.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CSX at https://www.zacks.com/ap/CSX