Company News

CSX Corp cuts earnings forecast after service disruptions

Sept 6 (Reuters) - CSX Corp cut its full-year 2017 earnings per share growth forecast on Wednesday and said its operating ratio, a closely watched performance metric, had worsened, in light of service problems this summer that sparked fierce customer blowback.

Shares in the No. 3 U.S. railroad were up more than 3 percent in a sign investors had braced for worse news following painful disruptions like rail cars sitting idle or being re-routed circuitously, late shipments, and train derailments.

After various operating problems in July and August, CSX Chief Financial Officer Frank Lonegro told a conference on Wednesday the company now expects its operating ratio, which measures operating costs as a percentage of revenue - so a decline marks an improvement - to be “around the high end of the mid-60s” versus firmly in the mid-60s.

Lonegro also said it trimmed its full-year earnings per share profit growth from around 25 percent to a range of 20-25 percent. (Reporting by Eric M. Johnson in Seattle; Editing by Phil Berlowitz)