January 20, 2010 / 2:55 PM / 8 years ago

U.S. railroad shares fall after CSX results

NEW YORK, Jan 20 (Reuters) - Shares of U.S. railroads fell in early trading on Wednesday, after CSX Corp CSX.N, the No. 3 freight railroad, said price increases were slowing and predicted shipments of coal to U.S. utilities would be a headwind this year.

CSX executives said on a conference call with analysts it expected price increases of 4 percent to 5 percent this year, down from the fourth quarter’s 5.3 percent pace and the third quarter’s 6.3 percent pace.

The Jacksonville, Florida-based company also said it expects shipments of utility coal to be a headwind for most of the year, but added it sees steady growth in other commodities. The company also noted that trucking firms were increasingly competitive on price.

Utility coal accounts for the bulk of CSX coal shipments, a high-margin business that generates about a quarter of CSX revenues.

CSX reported better-than-expected quarterly earnings late on Tuesday, but analysts noted a tax benefit helped the company beat Wall Street forecasts.

CSX shares fell 6 percent to $47.40 in early trading. Union Pacific Corp (UNP.N) was down 5 percent to $62.14, while Kansas city Southern (KSU.N) and Norfolk Southern (NSC.N) each fell about 3 percent. Burlington Northern Santa Fe BNI.N shares were flat.

Reporting by Nick Zieminski, editing by Dave Zimmerman

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