CSX profit down but beats Wall Street view

CHICAGO (Reuters) - CSX Corp (CSX.N), the No. 3 U.S. railroad, on Tuesday posted a better-than-expected quarterly net profit, sending its stock up 7 percent as it took steps to cut costs and keep prices steady amid a steep drop in freight volumes due to the recession.

The Jacksonville, Florida-based company reported first-quarter net income of $246 million or 62 cents per share, down nearly 30 percent from $351 million or 85 cents per share in the same quarter in 2008.

Analysts, on average, expected earnings per share for the quarter of 51 cents, according to Reuters Estimates.

In after-market trade, CSX shares were up 7.2 percent at $30.60 from their official closing price on the New York Stock Exchange at $28.39.

Revenue in the quarter fell 17 percent to $2.25 billion from $2.71 billion on a 17 percent decline in freight volumes.

The railroad said the decline was due to "significant weakness in industrial production, housing starts, and consumer spending, as well as in the agriculture and energy sectors" and it was taking action to cut costs.

"We are taking tough actions to right-size our operations in this challenging environment," Chief Executive Michael Ward said in a statement. The railroad said a "wide range" of productivity initiatives had helped it trim operating expenses for the quarter by 17 percent to $1.73 billion from $2.09 billion a year ago.

CSX cut its fuel bill for the quarter to $191 million from $441 million last year.

In a filing with the U.S. Securities and Exchange Commission, CSX said that automotive-related freight volumes were down 53 percent, metal products fell 48 percent, lumber declined 25 percent, while phosphates and fertilizers dropped 34 percent. Coal carloads were down 6 percent.