CSX told investors it will report fourth-quarter earnings lower than Wall Street expected, largely from resort hotel losses, and said it will no longer offer long-term guidance amid the economy's troubles and woes in the manufacturing sector that makes up a big part of its rail customer base.
CSX, which runs a major eastern-U.S. railroad and the struggling Greenbrier resort hotel at White Sulphur Springs, W. Va., said its expected earnings of 63 cents a share would be about 90 cents except for a large writedown of its resort investment.
Otherwise, it said earnings would be up about 6 percent for the railroad as quarterly revenue rose about 4 percent to about $2.7 billion.
One analyst called the pre-announcement "fairly benign" for its rail sector news, while another said it implied lower rail performance than most have been estimating.
CSX said its quarterly rail gains were "driven by higher yields and fuel recovery," a reference both to freight pricing and fuel surcharges, "which are expected to offset the impact of significantly lower volumes."
"Our team's commitment helped CSX weather the difficult economic environment, which continues to impact our business," said Michael Ward, chairman, president and CEO.
CSX will report official results Jan. 20 after the stock market closes, and executives will discuss them with analysts in a conference call the next morning. But CSX said "given the current economic challenges, particularly the uncertainty facing U.S. manufacturing, the company is no longer affirming or providing long-term guidance" on what investors should expect from earnings.