CSX Corp. (CSX) said its first-quarter earnings fell 14% as winter-related disruptions contributed to higher costs and weighed on the railroad company's revenue growth.
The company estimated that weather-related disruptions increased expenses by roughly six cents a share during the quarter, and hit the contribution to revenue by about two cents a share to three cents a share.
However, the company's board also authorized a 7% increase in the quarterly dividend to 16 cents a share, an increase of a penny.
Over the longer term, railroad companies including CSX have been hurt by a slump in demand for coal used to generate electricity. Coal has lost major market share to natural gas in recent years as power generators switch to gas, due to the fuel's low cost as well as power companies' efforts to meet tighter emissions regulations.
CSX Chief Financial Officer Fredrik Eliasson had warned in March that colder-than-usual weather would pose operational challenges and hurt freight volume for the latest quarter. At the time, the company had expected the weather-related effects would be mitigated somewhat by broad-based growth in its merchandise and intermodal markets, as well as several million new tons of domestic coal.
In the latest quarter coal volume declined 1%, while intermodal shipments rose 5%. Merchandise volume improved by 2%, driven by growth in agricultural products and chemicals shipments.
CSX reported a profit of $398 million, or 40 cents a share, down from $462 million, or 45 cents a share, a year earlier. Revenue increased 1.8% to $3 billion.
Analysts polled by Thomson Reuters expected per-share profit of 37 cents and revenue of $2.99 billion.