OMAHA, Neb. (AP) — CSX delivered a 2 percent profit increase in the third quarter as the railroad operator overcame disappointing coal revenue with volume growth and higher shipping rates.
The results beat Wall Street expectations, and the railroad company slightly increased its outlook for the year.
Its shares rose in after-market trading Tuesday.
All the major freight railroads have been struggling with weak coal demand over the past two years as cheap natural gas prices prompted many utilities to switch fuels. CSX said coal revenue declined 9 percent in the third quarter to $720 million.
But CSX's other major freight sectors all improved in the quarter.
Revenue from shipments of intermodal containers that railroads haul from ports grew 8 percent to $431 million. And revenue from all other merchandise surged 7 percent to $1.7 billion as industrial and construction related shipments grew.
"I think the economy is getting better and that's helping the company," Edward Jones analyst Logan Purk said.
CSX Corp. operates over 21,000 miles of track in 23 Eastern states and two Canadian provinces.
The Jacksonville, Fla.-based railroad said that it earned $463 million, or 46 cents per share. That's up from $455 million, or 44 cents per share, a year ago.