A new $2 Billion stock buyback plan and increase in dividends had been announced by CSX Corporation following a high first-quarter profit which surpassed analysts’ predicted earlier income estimates. CSX stated on Tuesday that lower fuel costs have augmented the company’s earnings. The company, which is situated in Jacksonville, Florida, had recorded a net income of $442 million, as compared to $398 million the year before. CSX’s revenues rose to $3.03 billion, an increase less than 1%.
A compilation of 26 estimates provided by Bloomberg showed that earnings per share (45 cents EPS) were higher by 1 cent than the average predicted by analysts. This has caused share prices to soar and earn 3.6% to $ 34.39 during late trading at 5:21 pm in New York.
Mark Levin, an analyst for BB&T Capital Markets that is based in Richmond, Virginia said that the buyback is a bit of bone for investors and was substantially more than what was predicted in the BB&T Capital Market’s model. The new buyback plan will span the next 2 years and had resulted to increase in the company’s dividend per share by 13 percent to 18 cents.
Analysts have trimmed their profit estimates from 47 cents on average in the last month following reduced coal carloads in the industry’s shipments.
The merger of Chessie System and Seaboard Coastline Industries gave birth to CSX Industries. The eventual mergers of railroad concerns of previous companies have resulted to the formation of CSX Transportation. It’s present CEO is Michael Ward who is responsible for making the company a highly profitable one.