CSX Not Hurt by Slowing Economy

JACKSONVILLE, Fla. -- CSX Corp., the parent company of Jacksonville's CSX Transportation reported yesterday a fourth-quarter 2001 profit of $65 million, or 31 cents per share, up from $54 million, or 26 cents per share, the previous year, according to the Florida Times-Union.

CSX posted the 20 percent gain in net income despite a slowing economy and a $37 million expense incurred by the company as part of the settlement of a lawsuit involving a 1987 chemical tank car fire in a New Orleans switching yard. Excluding the after-tax expense of the settlement, CSX's income for the quarter was $102 million, or 48 cents per share.

CSXT operates the third-largest railroad in the United States. The latest three-month period was the seventh consecutive quarter CSXT has reported earnings exceeding the previous year's earnings.

Despite the recession, surface transportation, which includes the rail and intermodal units, had its strongest earnings since the first quarter of 1999. Operating income was $246 million, excluding the litigation provision, up from $205 million in the fourth quarter of 2000.

Decreased revenue and carloads were offset by cost cuts and lower fuel expenses, according to a CSX news release. During 2000, CSX was hurt by lingering delays and congestion after the company and Norfolk Southern Corp. divided Conrail Inc. in 1999. But the company has been improving its operations since then, CSXT President Michael J. Ward said.

"With service at much higher levels, we now have a compelling transportation product to sell and the entire organization is geared up for growth," he said. "The railroad operated at well below capacity in 2001. The track infrastructure, locomotive and car fleets are in good shape, and we are continuing to find ways to utilize these assets more efficiently."

The recession and the slowdown in business following the events of Sept. 11 drove down chemicals, autos, metals, paper, minerals and intermodal revenue for the quarter, but coal remained solid.

For 2001, CSX net income from continuing operations was $293 million, or $1.38 per share, compared to $186 million, or 88 cents per share, for 2000. Excluding the litigation provision, net income from continuing operations was $330 million or $1.55 per share, an increase of 77 percent.

In November, CSX agreed to settle a lawsuit in which 8,000-plus plaintiffs had been seeking $850 million, alleging exposure to toxic chemicals because the cancer-causing chemical butadiene leaked from a tank car at a CSXT yard and exploded.

A Louisiana court had originally awarded the plaintiffs $2.5 billion in punitive damages. Neither the company nor its attorneys have revealed how much CSX's insurers have agreed to pay the plaintiffs in addition to the railroad's $37 million.

CSXT operates in 23 states and has 35,000 employees. CSX is based in Richmond, Va.