Newspaper article The Florida Times Union

Freight Haulers CSX, Landstar Report Rise in Earnings; Both Companies Report Increases despite Moving Fewer Goods

Newspaper article The Florida Times Union

Freight Haulers CSX, Landstar Report Rise in Earnings; Both Companies Report Increases despite Moving Fewer Goods

Article excerpt

Byline: MARK BASCH

The weak economy is slowing down traffic for businesses that haul freight. But two Jacksonville-based transportation companies still increased their earnings in the third quarter.

Railroad company CSX Corp. reported late on Tuesday that earnings, excluding a one-time tax benefit in the third quarter of 2007, rose 40 percent to $382 million, or 94 cents a share. And Wednesday, trucking company Landstar System Inc. reported third-quarter earnings rose 12 percent to $32.8 million, or 62 cents a share.

The total volume of goods transported by CSX was lower in the third quarter of 2008. But total revenue rose by 18 percent to $2.96 billion. That's because CSX has been able to raise the prices that it charges its freight customers, even in a bad economy.

"Our service has been improving. As we do that, we create more value for our customers," Chairman and CEO Michael Ward said in an interview Wednesday.

"We find we can price for that value."

CSX has also controlled costs, with operating expenses falling to 75.2 percent of revenue in the quarter, down 2.5 percentage points from the previous year. The company has reduced its total head count by about 800 people over the past year to 33,405. Ward said that reduction has come from trains and yard crews throughout its system.

CSX's business will likely continue to be hurt by low demand for automobiles and construction materials. But Ward said some goods shipped by the railroad, such as coal and agricultural products, are generally recession-resistant.

"Half of our business is not dependent on the economy," he said.

Landstar's earnings actually exceeded its forecast of 54 cents to 60 cents a share. The company's earnings were increased by 3 cents a share by bus evacuation services provided by the company in Gulf Coast states affected by hurricanes. …

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