CSX, one of the country’s biggest railroad transportation companies, reported $459 million net income, or 45c per share, on $2.96 billion in revenue.
The result beat both Wall Street estimates and last year’s Q1 profit of $449 million.
CSX said that gains in merchandise, intermodal and other revenue offset declines in the company’s coal business.
Coal demand continues to be a concern for CSX and comparable companies due to environmental pressures, low industrial demand and relatively low natural gas prices which have prompted some utilities to switch from coal to gas.
CSX said coal revenue fell by 13% to $726 million in the quarter as it delivered less to utilities.
However, exports of metallurgical coal, used in steel making, rose to 7 million tons over 6.3Mt in 2012.
CSX predicts its earnings will be relatively flat in 2013 but should grow 10-15% in 2014 and 2015.
CSX chairman, president and chief executive officer Michael J Ward said the company was proud to announce a profit at a time when the economy was still struggling.
“We are prepared for the economy to accelerate and have great confidence in the long-term outlook for the business,” he said.
“These actions reflect the strength of CSX’s core earning power and its confidence in the future.
“They build upon the $2.3 billion of investment CSX is making this year to meet the nation’s future transportation needs and drive long-term shareholder value.”
The company at the same time announced board approval for a $1 billion share buyback program, as well as a 7% increase in the quarterly dividend.
The announcement bodes well for Union Pacific, the biggest railroad operator in the US, to announce its Q1 results on Thursday.
