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Weak coal demand hurts CSX profits



OMAHA, Neb.

CSX Corp. said this week that its fourth-quarter profit declined 5 percent as coal demand remained weak and total volume slipped 6 percent.

The results raise questions about the health of the overall economy. The Jacksonville, Florida based railroad hauled fewer agricultural products, chemicals and construction materials, among other categories, in the quarter.

The railroad’s results suggest that industrial parts of the economy are slowing down while consumer driven businesses continue doing well, Edward Jones analyst Logan Purk said.

“That’s certainly not the best outlook for the U.S. economy,” Purk said.

CSX said it earned $466 million, or 48 cents per share, in the last three months of 2015. That’s down from $491 million, or 49 cents per share, a year ago.

The railroad’s $2.78 billion revenue fell short of the $2.92 billion analysts expected.

Coal demand has fallen significantly over the past several years because of environmental concerns and because cheap natural gas prices prompted some utilities to switch fuels. Coal carloads fell 32 percent in the fourth quarter.

CSX shares have declined 9 percent since the beginning of the year, while the Standard & Poor’s 500 index has dropped 5 percent.



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