OMAHA, Neb. (AP) — CSX railroad expects to deliver modest profit growth this year, but the impact of the severe winter will linger into the second quarter.
Officials with the railroad said on a conference call Wednesday that the improving economy and stronger domestic utility demand for coal will boost CSX's earnings in the second half of this year and in 2015.
The Jacksonville, Fla.-based railroad had said Tuesday that the harsh winter disrupted shipments and contributed to a 14 percent drop in its first-quarter profit even as it hauled 3 percent more freight.
CSX's results hint at what investors can expect from other transportation companies because they were all affected by the brutal winter, but they also suggest the economy continues growing steadily.
CSX Corp. stock declined more than 3 percent to $27.36 in afternoon trading Wednesday.
The January-March quarter was more challenging because of the sustained cold and heavy snow that fell across much of the country, said Michael Ward, the railroad's president, CEO and chairman, in an interview.
"It was one storm after another and cold in between," Ward said.
CSX is still clearing a backlog of freight across its network and identifying areas that may need improvements in the future. Ward said the Chicago area's cold, snowy winter was especially problematic because all the major freight railroads connect in Chicago and commuter trains use some of the same rails. There is already a long-term plan in place to improve rail traffic through Chicago.
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