Eastern Railroad Discussion > CSX beats on earnings, revenues, will buy back stock

Operating ratio of 60.3% for the year

Another five billion dollars allocated to stock buybacks as the current round completes

https://www.csx.com/index.cfm/about-us/media/press-releases/csx-announces-fourth-quarter-and-full-year-2018-financial-results-authorizes-5-billion-share-buyback/

wow it was a lone conference call. highlights are going to take several years to get the operating ratio down from 60 to 55. intermodal carloading expected flat or slighly up this year. 
ontime train arrival at 58% on time departures 77%. capital budget $1.6b this year but no money allocated for the howard street tunnel in baltimore. 

I would have thought that originations and on time arrivals would have been better than 77% and 58%, considering how "successful" Precision Scheduled Railroading has been. I am also surprised large gains were not reported on the intermodal side. I read reports where NS is going to expand some of their terminals.



Edited 1 time(s). Last edit at 01/16/19 17:07 by PRR_4859.

Seems the low hanging fruit has all been picked. $NSC and $UNP next week. Wall Street and stock prices are a “ what have you done for me lately” game. 

   Tom


Lackawanna484 Wrote:
-------------------------------------------------------
> Operating ratio of 60.3% for the year
>
> Another five billion dollars allocated to stock
> buybacks as the current round completes
>
> https://www.csx.com/index.cfm/about-us/media/press
> -releases/csx-announces-fourth-quarter-and-full-ye
> ar-2018-financial-results-authorizes-5-billion-sha
> re-buyback/

Allison Landry, asked a very specific question about departures and arrivals.  Why do these numbers still look pretty bad? 

Jim Foote:Hi, Allison. Yes. We were clearly disappointed with that metric during this quarter and worked extremely hard on that. Both originations on-time and arrivals were clearly not where they need to be. How do you get them better? You execute. The train is supposed to depart on schedule so that it can arrive at the next terminal. So that the assets and the crew and everything are balanced as we run around our network. It needs to get out of the terminal on time. And then, there can't be an event en route that causes it to experience a delay so that it doesn't arrive in the destination terminal where it needs to on-time. And so it's just execution.It's constantly looking at all of the root causes of what caused the failure en route. So, is it a mechanical issue, do we need to, are we focusing on, what causes the engines to fail? Are there systemic issues that caused the locomotives to fail, which causes the train not to get across the river? Are there mechanical issues? Are there engineering issues that we need to address? Are there crew balancing issues that we need to address?So it is all of those various elements in the way you run the railroad that you need to focus on in order to get those numbers up. I can tell you that the on-time origins and arrivals in our most recent numbers have been, I certainly hope that we can maintain this and don't get whacked with a bunch of crazy snowstorms, but are significantly better than where they were in the fourth quarter.
(If you don't have rested crews, trains ready to go, power that works, you're not going to make your numbers)

Transcript of the conference call:  https://seekingalpha.com/article/4233885-csx-corporation-csx-ceo-jim-foote-q4-2018-results-earnings-call-transcript?part=single

Bloomberg is saying this morning that CSX stock is down considerably because of future projections (sorry, I can't remember what all the technical babble for this was), and this is happening after they announced their increased stock buy backs.  Sounds like some of the "shine" that "Wall Street" liked with CSX and PSR is starting to dull.

It strikes me how stupid top managers of companies that just try to please "Wall Street" are!  It is such a short sighted philosophy as no matter what the company is, there is now way one can keep producing ever increasing/record breaking profits, time after time again, into the future forever.  Not even the beloved Apple can do this.  All "Wall Street" cares about is getting huge growth in stock prices and profits, but neither of these can go on forever.  As soon as the "bull run" is over, they dump you and move on to other stupid companies that they can milk to death.

What's going to happen to all these new "PSR" railroads if they do not get the lucky win fall (ie bustling economy and being in the right place where there was big traffic growth is) that CN got at the end of their "PSR" torture ?  What's going to happen if the economy slows way down and you've driven off and lost many of your customers because of bad service and arrogance?

Based on conf call transcript, Re: Howard St tunnel in Baltimore, CSX reduced the $ it’s willing to contribute to the clearance project suggesting Maryland has the motivation to find the increased balance of $ needed. CSX appears to be low key about the project.

Posted from iPhone

Lackawanna484 Wrote:
-------------------------------------------------------
> Allison Landry, asked a very specific question
> about departures and arrivals.  Why do these
> numbers still look pretty bad? 
>
> Jim Foote:Hi, Allison. Yes. We were clearly
> disappointed with that metric during this quarter
> and worked extremely hard on that. Both
> originations on-time and arrivals were clearly not
> where they need to be. How do you get them better?
> You execute. The train is supposed to depart on
> schedule so that it can arrive at the next
> terminal. So that the assets and the crew and
> everything are balanced as we run around our
> network. It needs to get out of the terminal on
> time. And then, there can't be an event en route
> that causes it to experience a delay so that it
> doesn't arrive in the destination terminal where
> it needs to on-time. And so it's just
> execution.It's constantly looking at all of the
> root causes of what caused the failure en route.
> So, is it a mechanical issue, do we need to, are
> we focusing on, what causes the engines to fail?
> Are there systemic issues that caused the
> locomotives to fail, which causes the train not to
> get across the river? Are there mechanical issues?
> Are there engineering issues that we need to
> address? Are there crew balancing issues that we
> need to address?So it is all of those various
> elements in the way you run the railroad that you
> need to focus on in order to get those numbers up.
> I can tell you that the on-time origins and
> arrivals in our most recent numbers have been, I
> certainly hope that we can maintain this and don't
> get whacked with a bunch of crazy snowstorms, but
> are significantly better than where they were in
> the fourth quarter.
> (If you don't have rested crews, trains ready to
> go, power that works, you're not going to make
> your numbers)
>
> Transcript of the conference call: 
> https://seekingalpha.com/article/4233885-csx-corpo
> ration-csx-ceo-jim-foote-q4-2018-results-earnings-
> call-transcript?part=single

Here's an idea, how about running REALISTIC length trains that can be built more quickly, get the air built up more quickly, fit into the sidings you have, make track speed and actually fit into the yard at the destination.  Mr. Foote might be shocked at performance increases THAT might accomplish.



Edited 1 time(s). Last edit at 01/17/19 11:00 by junctiontower.

The quick and easy way to get the OR down is to stop any new capex and defer maintenance.  With the money saved, you buy back stock.  What a hell of a way to run a "business".

PRR1361 Wrote:
-------------------------------------------------------
> The quick and easy way to get the OR down is to
> stop any new capex and defer maintenance.  With
> the money saved, you buy back stock.  What a hell
> of a way to run a "business".

I think I read the ratio of capital expenditures is a billion dollars compared to the five billion in additional buybacks.  Even with a downsizing railroad like CSX, that's a red flag.

Lackawanna484 Wrote:
-------------------------------------------------------
> Allison Landry, asked a very specific question
> about departures and arrivals.  Why do these
> numbers still look pretty bad? 
>
> Jim Foote:Hi, Allison. Yes. We were clearly
> disappointed with that metric during this quarter...

Blah, blah, blah...  I won't waste space by copying the entire answer.  So, Jim Foote says it was a failure in execution.  Since he is CEO, responsible for the company (geez, that's why he makes the big bucks!), well, then it is obvious that Jim Foote has failed in the execution of his company.

Oh yeah, the CEO is only responsible for the company when it comes to his salary and benefits, so they must be huge.  After that, it's the failure of everyone else when things go wrong, he can't help that...

Lackawanna484 Wrote:
-------------------------------------------------------
> Allison Landry, asked a very specific question
> about departures and arrivals.  Why do these
> numbers still look pretty bad? 
>
> Jim Foote:Hi, Allison. Yes. We were clearly
> disappointed with that metric during this quarter
> and worked extremely hard on that...

And still FAILED...    Open mouth...  Insert Foote...

If only the investors knew how many trains depart hours late on a daily basis (for months now) because they don't have power. They are so proud of those stored locomotives. If the wheels aren't turning the company isn't earning. It's all bullshit. You work here you know how much its all a house of cards predicated on lies.

And when the top guy fails, usually get rid of a few guys directly under him and reshuffle the deck. Unfortunately, they are the fall guys for carrying out their marching orders!

Posted from iPhone

Stock buybacks are a terrible way to spend money. 
Read about GE and stock buybacks. Are executives
working to shore up stock market price so they can
exercise their coveted stock awards?  

I am making a move to a 300 mile pool...with the speeds we run it's dicey to make the whole thing in 12 hours. Yesterday one of those crews was called for 0400....and their train should have just been finished fueling as they came on duty...but the train never came into town since it was blocked by a road switcher doing it's work.......therefore the new crew actually left an hour and a half late. And did not make it to the away terminal....a railroad has to accomodate more that one train at a time. That's a given....but if a particular train needs a priority move, you have to make plans all over the route to get that move to happen as desired. It has to be expected that in the larger sense....delays happen.....you can plan and plan and plan, but delays happen. The better business is...I should say...the harder it is to plan. On time perfomance is a thing to shoot for.....but it's a bell that cannot be rung with regularity. 

Creating the right mix of incentives in any business is always a moving target.

Once you have mutual trust and respect, bolting on local targets over which the local staff has some control is a starting point.

The example of a priority train stabbed by a local switch is classic.

Posted from Android

Lackawanna484 Wrote:
-------------------------------------------------------
> Creating the right mix of incentives in any
> business is always a moving target.
>
> Once you have mutual trust and respect, bolting on
> local targets over which the local staff has some
> control is a starting point.
>
> The example of a priority train stabbed by a local
> switch is classic.
>
> Posted from Android

Yes, indeed Amtrak getting stuck by a train too long to get into a siding is another snafu.....the sitckier wicket however is PSR that promises to smooth all that out....of course it cannot  but it toots it's horn that it can....of course what it really does is just wring productivity out of reduced assets. 

Based on Foote's answer it seems he is beginning to realize that running a railroad consists of more than issuing BS press releases.
Lucky for him that he is surrounded by PSR yes men who will figure it all out.  NOT !



Edited 1 time(s). Last edit at 01/21/19 07:36 by Englewood.

One of the death rattles of the Ward / Sanford regime was the monster train. Another was the 28 hour start program.

Both were monumental failures.

Total lack of understanding the business.

Posted from Android