Newspaper article The Florida Times Union

Analyst Expects CSX Success to Keep Chugging

Newspaper article The Florida Times Union

Analyst Expects CSX Success to Keep Chugging

Article excerpt

Byline: Mark Basch, Times-Union business writer

CSX Corp. still has a way to go to get back to its July 1997 peak of $62.44. But in an overall sour stock market over the past year, CSX has been one of the most consistent performers.

Following a modest 7.5 percent rise to $36.24 in the second quarter, CSX has recorded gains in its stock price for four consecutive quarters, one of only 33 stocks in the Standard & Poor's 500 to accomplish that. The stock jumped a total of 71 percent from mid-year 2000 to mid-year 2001.

At least one analyst thinks the good times will continue for CSX.

After several years of consolidation hurt the financial performance of railroads in general and CSX in particular, Credit Suisse First Boston analyst Gary Yablon said in a report last week that the railroads are back on track.

"While it may take some time for the stocks to truly reflect what is occurring beneath the surface, we believe the reward/risk ratio is better than it has been in many years," he said.

CSX last week announced that second-quarter earnings from operations would be about 51 cents a share, well above the consensus forecast of 36 cents by analysts surveyed by First Call Corp.

CSX also said it was slashing its quarterly dividend from 30 cents a share to 10 cents, but investors seemed to shrug that off. The stock rose $1.70 to $37.40 after the Wednesday announcements about earnings and the dividend.

Groceries fall together

Winn-Dixie Stores Inc.'s stock fell $1.35 to $23.50 last Monday after another supermarket giant, Safeway Inc., reported disappointing second-quarter sales.

California-based Safeway said sales at stores open at least a year rose 1.1 percent in the quarter, much less than the 2.5 percent to 3 percent gain the company forecast in April. That raised concern among analysts that competition from other retailers like Wal-Mart Stores Inc. and Costco Wholesale Corp. is hurting supermarkets. Safeway's stock fell $3. …

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