(Reuters) -CSX reported third-quarter profit and revenue above Wall Street estimates on Thursday as improving intermodal volumes and higher pricing in merchandise helped offset the impact from lower coal prices, sending the railroad operator's shares up 3%.
Weakness in the coal market has remained a headwind for the East Coast railroad operator due to lower demand as consumers turn to cheaper natural gas stockpiles for energy.
"Our domestic coal business continues to see steady trends through the year,"
said COO Mike Cory in an earnings call.
Demand for coal is expected to rise after U.S. President Donald Trump signed executive orders earlier this month that aim to boost coal production, benefiting railroad operators.
On an adjusted basis, CSX reported per-share profit of 44 cents, above analysts' average estimate of 42 cents apiece, according to data compiled by LSEG.
The company reported revenue of $3.59 billion in the quarter ended September 30, slightly above analysts' average estimate of $3.58 billion.
However, quarterly revenue decreased 1% year-over-year, impacted by lower export coal prices and a decline in merchandise volumes, which were partially offset by increases in other revenues, higher merchandise pricing and intermodal volume growth, CSX said.
Coal revenue declined 11% for the quarter on 3% lower total volume.
The Jacksonville, Florida-based company forecast fiscal-year 2025 capital expenditure of $2.5 billion, excluding hurricane rebuild spending.
Earlier this year, CSX drew up interline and intermodal service agreements with BNSF Railway and the Canadian National Railway.
Peer Union Pacific announced in July it would acquire rival Norfolk Southern in an $85 billion deal. The tie-up, if approved, could reshape the U.S. freight rail industry by creating the first coast-to-coast single-line network.
(Reporting by Anshuman Tripathy and Aatreyee Dasgupta in Bengaluru; Editing by Pooja Desai)
