OMAHA, Neb. (AP) — CSX Corp. expects 2013 to be another challenging year for the railroad, with continued weak coal demand but growth in other areas likely to offset lower coal volume.
Executives at the Jacksonville, Fla.-based railroad held a conference call with investors Wednesday — a day after CSX reported a 3 percent decline in fourth-quarter profit.
CSX Chairman, CEO and President Michael Ward said some coal users will continue to shift to natural gas in 2013, and the weak global economy will undercut demand for industrial coal use.
"2013 will be another challenging year as the evolution of the energy market continues but stabilizes," Ward said.
CSX officials predict domestic coal shipments will decline by 5 to 10 percent in 2013 from last year's weak levels. And coal exports will likely drop to 40 million tons from last year's 48 million tons.
S&P Capital IQ analyst Kevin Kirkeby said in a research note that coal will remain a headwind for CSX longer than expected, but the railroad's other sectors should steadily improve throughout 2013.
In the first quarter of 2013, CSX officials expect shipping volumes to grow enough in intermodal, crude oil, fertilizer and building products to offset the decline in coal. So total volume in the quarter should be flat.
Ward said he expects the economy to continue growing slowly this year, but it would likely help if lawmakers in Washington could approve a long-term fiscal plan.
Continue reading this story on the...