CSX says railroad won't deliver double-digit profit growth this year because coal demand weak

IndustriesAssociated Press

CSX now says that the railroad won't deliver the double-digit profit growth it promised this year because coal demand remains weak.

Executives remain optimistic about the railroad's prospects because service is improving, but they said Wednesday, a day after posting first-quarter earnings, that mid-to-high single-digit profit growth is likely in 2015.

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Quarterly profits grew 11 percent and exceeded Wall Street expectations, but it was lower than the projections from CSX. The strong dollar is hurting coal exports and low natural gas prices have cut into demand for coal from utilities.

CSX Corp. reported $442 million in first-quarter net income, or 45 cents per share, on $3.03 billion revenue. Outside of coal, CEO Michael Ward said the railroad expects modest growth in shipments and more room to increase rates.