Company News

CSX to outline path forward after death of former CEO Harrison

March 1 (Reuters) - CSX Corp’s management team will provide investors on Thursday with the railroad’s longer-term plan for boosting profitability and streamlining operations following the death of Chief Executive Officer Hunter Harrison.

Harrison, a favorite of investors for leading turnarounds of two Canadian railroads, died in December just eight months into an overhaul that included shutting multiple rail yards, deep job cuts, mothballing locomotives and running trains on tight schedules rather than based on customer needs.

The new CEO, Jim Foote, and his management team are due to address investors at a conference in New York on Thursday, where investors will be eager for details on how much work is left to be done.

The railroad said earlier this month it would substantially lower its operating ratio - a closely watched measurement of profitability – to 60 percent by 2020 from 67.9 percent at year-end 2017. The operating ratio is a measure of operating expenses as a percentage of revenue.

CSX shares have risen about 50 percent since January 2017 and about 12 percent since March 2017 after Harrison took over as CEO following a high-stakes push by activist investor Paul Hilal of investment fund Mantle Ridge LP.

But CSX’s share growth has come with depleted rail service. Many rail customers have seen persistent service disruptions and delays that have raised shipping costs.

Several shippers have told Reuters that service has been steadily improving from a nadir last summer, although companies like U.S. agricultural firm Cargill Inc and coal company Murray Energy Corp are still struggling with crew and rail car shortages. (Reporting by Eric M. Johnson in Seattle; Editing by Peter Cooney)