(Reuters) - CSX Corp, the third-largest U.S. railroad operator, reported a better-than-expected rise in quarterly net profit on Tuesday as coal shipments helped drive revenue growth.
The company also said it expects full-year profitability to increase. It authorized an additional $500 million for its share repurchase program and said it was evaluating its strategy for distributing cash to shareholders.
The Jacksonville, Florida-based railroad said revenue rose 8 percent in the quarter, based on growth across nearly all of its freight markets. Coal revenue jumped 27 percent.
Coal has made something of a comeback this year, after precipitous declines over the previous two years as utilities switched to burning cheaper natural gas and unseasonable weather kept coal inventories high.
CSX posted second-quarter net income of $510 million or 55 cents per share, up from $445 million or 47 cents per share a year earlier. Excluding one-time items, CSX reported earnings per share of 64 cents.
On that basis, Wall Street analysts had expected CSX to post second-quarter earnings of 59 cents per share.
The company's results included a $122 million restructuring charge.
Including the charge, CSX posted an operating ratio - or operating expenses as a percentage of revenue, a key rail metric for Wall Street - of 67.4 percent, an improvement over the same period in 2016 of 68.9 percent.
The company said that adjusting for restructuring charges, it expected a full-year operating ratio in the "mid-60s" and earnings per share growth of around 25 percent versus 2016.
