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By Nick Carey
CHICAGO, July 14 (Reuters) - No. 3 U.S. railroad CSX Corp on Tuesday reported a higher quarterly net profit, beating forecasts as productivity gains and lower fuel prices offset a drop in coal volumes that took a bite out of revenue.
CSX shares jumped more than 3 percent in after-market trading, as the company also largely maintained its earnings outlook for the year despite the hit to its coal business.
Like all the major railroads, CSX has been pummeled by a decline in coal volumes as power plants have switched to burning more natural gas due to lower prices for that fuel. Meanwhile, coal exports have been hurt by the strong U.S. dollar.
Analysts have lowered estimates for the sector in recent weeks, citing ongoing coal weakness, but also poor grain shipments and a faltering crude-by-rail business.
CSX said coal revenue for the quarter fell 15 percent, contributing to an overall sales decline of 6 percent. The company said it expects coal volumes to be down approximately 10 percent for the full year.
But CSX received a boost from a fuel bill of $263 million for the quarter, 37 percent lower than the $416 is paid out in the second quarter of 2014. The company managed overall to lower second-quarter expenses by 9 percent.
The Jacksonville, Florida-based company reported a second-quarter net profit of $553 million or 56 cents per share, up nearly 5 percent from $529 million or 53 cents per share a year earlier.
Analysts had expected earnings per share of 53 cents.
CSX said it expects to deliver mid to high single-digit percentage earnings per share growth in 2015, but added “the upper end of that range has become more challenging given the current energy environment.”
The company reported revenue for the quarter of $3.06 billion compared with $3.24 billion a year earlier.
Analysts had expected revenue of $3.12 billion.
In after-market trading CSX shares were trading up 3.2 percent at $33.11. (Reporting By Nick Carey; Editing by David Gregorio)