MIAMI -- Giant North American railroads heavily dependent on the
overall vigor of the U.S. economy got a lift from cheap fuel in late
2001 but remain dogged by sagging revenues blamed on economic
recession, a wire service reports.
“We have been in a
recession and the economy is recessionary still,” Michael Ward,
president of CSX Transportation, told institutional investors on
Tuesday.
CSX Corp., the parent of CSX Transportation, said
strong coal shipments in late 2001, cost-cutting and cheap fuel had
helped it overcome unusually weak fourth-quarter revenues and on
Tuesday posted a 20 percent percent jump in net income, to $65
million, or 31 cents a share.
The Richmond, Virginia,
operator of the biggest rail network in the eastern United States,
said earnings before unusual items related to a legal settlement
totaled $102 million, or 48 cents a share.
Analysts had
expected 46 cents to 52 cents a share, with a consensus forecast of
48 cents, according to Thomson Financial/First Call.
Revenues
slipped to a disappointing $2.01 billion from $2.05 billion, CSX
executives said.
Forecasting a big lift in profitability when
the U.S. economy again expands, CSX executives said revenues for
chemicals, autos, metals, paper and minerals had declined after the
September 11 airliner attacks, as had revenues from shipments
carried on a mix of rail and other transports.
Coal shipments
were up sharply, and the average cost of fuel dropped to 81 cents
from $1.12 in the fourth quarter, CSX executives said during a
conference call. Productivity measures had also showed good gains,
the executives said.
“We have the capacity. All we need is a
little help from the economy,” Ward said.
Burlington Northern
Santa Fe Corp., the No. 2 U.S. railroad, also reported on Tuesday
and said its fourth-quarter profits, before unusual items, fell 13
percent as freight revenues slipped.
Burlington's profits
were $472 million, or 57 cents a share, down from $544 million, or
65 cents a share, a year earlier. Wall Street analysts had expected
54 cents to 60 cents a share, with a consensus forecast of 56 cents,
according to a survey of nine analysts by Thomson Financial/First
Call.
Net earnings in the latest quarter, ended Dec. 31, were
46 cents a share for Burlington Northern. including charges of 11
cents a share to pay for job cuts.
“It was as expected,”
said an industry analyst, speaking on condition of anonymity.
“Nothing in it caught me off guard.”
Revenues fell to $2.3
billion from $2.34 billion, in part because of the loss of a major
transport contract with giant automaker General Motors Corp. Freight
revenues fell 2 percent, to $2.27 billion.
Revenues for
transporting consumer goods such as cars fell 8 percent to $819
million.
Coal shipment revenues rose 3 percent, to $546
million, on a 9 percent rise in volumes, helped by stepped-up buying
by electricity generators and new business, Burlington Northern
said.
Shares of both Burlington Northern and CSX rose on
Monday.
Burlington, which has lagged other rails in a broad
rally driven by hopes of a rebound in U.S. economic growth, was up
42 cents, or 1.5 percent, to $27.35.
CSX, whose shares have
risen about 27 percent in the last 12 months, rose another 2.5
percent, or 92 cents, on Tuesday to $37.51.