CSX Corporation reported its financial results for the first quarter of 2005. Net earnings were $579 million, or $2.56 per share, including a net after-tax gain of $425 million, or $1.88 per share, resulting from the sale of the Company's International Terminals business. Earnings per share from continuing operations were 68 cents in 2005 versus 13 cents in the prior year's quarter, which was reduced by a 14-cent management restructuring charge at the Company's Surface Transportation units in 2004. Surface Transportation operating income was a record $351 million versus $151 million a year ago, which was reduced by a $53 million management restructuring charge in 2004.
CSX's core Surface Transportation businesses produced record operating income, driven by a 10 percent increase in revenue and better cost discipline. On a comparable basis, adjusting for the 2004 management restructuring charge, Surface Transportation operating income for 2005 increased $147 million, or 72 percent, year over year. CSX's operating ratio for the quarter was 83.3 percent, an improvement of more than 6 points versus the first quarter of 2004. "We are very pleased with the 72 percent year-over-year increase in operating income that the employees of CSX produced in the first quarter," said Michael Ward, CSX Corporation chairman, president and chief executive officer. "CSX continued on its path of consistent, continuous improvement producing year-over-year growth in core earnings for the fifth consecutive quarter."
Surface Transportation revenue for the quarter was $2.1 billion versus $1.9 billion in the same quarter last year. Revenue gains in the quarter were led by strength in the Company's coal and merchandise markets, which produced 20 percent and 8 percent year-over-year revenue gains, respectively. Ward added, "A strong pricing environment resulting from high demand contributed significantly to the Company's year-over-year revenue growth with CSX's value pricing and yield management initiatives, along with the fuel surcharge program, driving the top line improvements. "The Company remains focused on continuing to drive improvements in its operational and safety performance, sustaining its top line performance by pricing our service to market levels, and improving our bottom line performance through better cost discipline," said Ward.
Also in the first quarter of 2005, CSX sold its International Terminals business for cash consideration of $1.142 billion, subject to final working capital and long-term debt adjustments that have not yet been determined. CSX recognized an after-tax net gain of $425 million as a result of the sale, including a loss on operations for the quarter.