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Researched by Industrial Info Resources (Sugar Land, Texas)--Eastern U.S. railroad CSX Corporation (NYSE:CSX) (Jacksonville, Florida) is targeting $2.5 billion in capital expenditures (capex) for 2015, a $200 million increase over its target a year earlier, company executives said Wednesday during the fourth-quarter earnings conference call. CSX reported its fourth-quarter 2014 earnings rose 15% from a year earlier to $491 million. Revenues for the quarter ended December increased 5% to $3.2 billion on the strength of its merchandise, intermodal and coal shipments.
Industrial Info is tracking 42 active CSX projects worth $2.76 billion.
Nearly half of the capex this year will be used to maintain the railway's core infrastructure, said Chief Financial Officer Fredrik Elliason. He added that the railway plans to spend an additional $300 million on positive train control (PTC), a system of functional requirements for monitoring and controlling train movements to provide increased safety. CSX already has spent $1.2 billion on PTC, and plans to spend an additional $400 million in 2016, he said.
For the full year, CSX reported net earnings of $1.9 billion, up 3% from 2013, and revenue of $12.7 billion, up 5%.
Looking forward, the company said it expects to see double-digit earnings share growth in 2015.
Company executives said they do not expect to see a negative impact from falling crude oil prices. Crude-by-rail shipments make up only 2% of CSX's revenue, said Clarence Gooden, executive vice president for sales and marketing and chief commercial officer. Most of its frac sand (sand for hydraulic fracturing) shipments go to natural gas production operations in the eastern U.S., he said. The lower oil prices are "very positive for our economy, very positive for CSX," he said.
CSX will continue to see challenges in coal shipments. The company expects to see a 25% drop in export thermal coal volumes in 2015 due to weak international markets. Coal revenues from domestic use and exports amounted to 22% of the company's total revenue last year.
During the fourth quarter, revenue from merchandise shipments rose 6% from the same quarter in 2013 to nearly $1.82 billion. The Merchandise segment reported a 13% increase in revenue from chemical shipments revenue, a 3% rise in automotive shipment revenue, and an 8% rise in metals revenue. Chemicals volume growth was driven by an increase in energy-related shipments. Automotive volume growth was due to an increase in North American light vehicle production, and metals volumes grew because of an increase in sheet steel shipments. The volume of forest products that were shipped by rail also grew substantially.
Fourth-quarter revenue from coal shipments grew 6% to $722 million, CSX reported. Domestic utility coal volumes jumped 22% as utilities replenished stockpiles ahead of the winter heating season. Shipments of domestic coke and iron ore also rose substantially, while export metallurgical coal volumes rose slightly. Export thermal coal fell 20% as global market conditions continued to weaken, according to the company.
Revenue from intermodal traffic increased 6% from a year earlier to $465 million.
Industrial Info is tracking three CSX projects, worth $215 million, that are under construction; 20 projects, worth $1.33 billion, in the engineering phases; and 19 projects, valued at $1.21 billion, that are in the planning stages.
CSX's statewide network upgrade and rehabilitation project for Ohio has a total investment value of $120 million. CSX was defining the scope of the project, which would kick off this month and see completion in fourth-quarter 2015.
The company recently saw the completion of its Hopkinsville grassroot inspection rail yard in Pembroke, Kentucky. The project, valued at $80 million, included construction of a new rail yard facility to stage trains for inspection and fueling, and to primarily support the coal unit trains servicing the local mines in Kentucky. Balfour Beatty Rail (Atlanta, Georgia) and Stewart-Richey Construction Incorporated (Bowling Green, Kentucky) participated in the project.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Industrial Info is tracking 42 active CSX projects worth $2.76 billion.
Nearly half of the capex this year will be used to maintain the railway's core infrastructure, said Chief Financial Officer Fredrik Elliason. He added that the railway plans to spend an additional $300 million on positive train control (PTC), a system of functional requirements for monitoring and controlling train movements to provide increased safety. CSX already has spent $1.2 billion on PTC, and plans to spend an additional $400 million in 2016, he said.
For the full year, CSX reported net earnings of $1.9 billion, up 3% from 2013, and revenue of $12.7 billion, up 5%.
Looking forward, the company said it expects to see double-digit earnings share growth in 2015.
Company executives said they do not expect to see a negative impact from falling crude oil prices. Crude-by-rail shipments make up only 2% of CSX's revenue, said Clarence Gooden, executive vice president for sales and marketing and chief commercial officer. Most of its frac sand (sand for hydraulic fracturing) shipments go to natural gas production operations in the eastern U.S., he said. The lower oil prices are "very positive for our economy, very positive for CSX," he said.
CSX will continue to see challenges in coal shipments. The company expects to see a 25% drop in export thermal coal volumes in 2015 due to weak international markets. Coal revenues from domestic use and exports amounted to 22% of the company's total revenue last year.
During the fourth quarter, revenue from merchandise shipments rose 6% from the same quarter in 2013 to nearly $1.82 billion. The Merchandise segment reported a 13% increase in revenue from chemical shipments revenue, a 3% rise in automotive shipment revenue, and an 8% rise in metals revenue. Chemicals volume growth was driven by an increase in energy-related shipments. Automotive volume growth was due to an increase in North American light vehicle production, and metals volumes grew because of an increase in sheet steel shipments. The volume of forest products that were shipped by rail also grew substantially.
Fourth-quarter revenue from coal shipments grew 6% to $722 million, CSX reported. Domestic utility coal volumes jumped 22% as utilities replenished stockpiles ahead of the winter heating season. Shipments of domestic coke and iron ore also rose substantially, while export metallurgical coal volumes rose slightly. Export thermal coal fell 20% as global market conditions continued to weaken, according to the company.
Revenue from intermodal traffic increased 6% from a year earlier to $465 million.
Industrial Info is tracking three CSX projects, worth $215 million, that are under construction; 20 projects, worth $1.33 billion, in the engineering phases; and 19 projects, valued at $1.21 billion, that are in the planning stages.
CSX's statewide network upgrade and rehabilitation project for Ohio has a total investment value of $120 million. CSX was defining the scope of the project, which would kick off this month and see completion in fourth-quarter 2015.
The company recently saw the completion of its Hopkinsville grassroot inspection rail yard in Pembroke, Kentucky. The project, valued at $80 million, included construction of a new rail yard facility to stage trains for inspection and fueling, and to primarily support the coal unit trains servicing the local mines in Kentucky. Balfour Beatty Rail (Atlanta, Georgia) and Stewart-Richey Construction Incorporated (Bowling Green, Kentucky) participated in the project.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
