The new chief executive officer of CSX, Hunter Harrison, has been at the helm of the railroad for four months. During this time, Harrison started off a restructuring mobilization. Even though this move meant sharp changes within the organization, he is confident that his restructuring agenda would shortly reveal the fruits of his labor.
CSX Restructuring Agenda Will Implement Additional Changes Well Into 2018
On Wednesday, Hunter Harrison admitted that he is content with his leadership so far at CSX Transportation. The CEO had previously had other three railroads in his hands where he ordered similar turnarounds. These were Canadian Pacific, Canadian National and the Illinois Central railroads.
This year only, the Florida-based company eliminated 900 locomotives and 60,000 cars and departed from 2,300 employees. Harrison claimed that the positive implications of these restructuring efforts are yet to come.
However, the revamping is not over yet. CSX intends to streamline its operations by letting go of the entire infrastructure that doesn’t have any use for them anymore. This means that the company might shut down almost all 12 rail yards that have become redundant over the years. Other strategies include focusing all current nine scattered dispatch points into one central position next year.
Wall Street Sanctioned CSX Shares as soon as Harrison Revealed Plans for the Future of the Company
Nonetheless, Wall Street is not so impressed with the proposed restructuring agenda. As a consequence, the shares plummeted 5.1% or $2.77. Therefore, the trading day on Wednesday closed at $51.87. On the other hand, Harrison seemed confident that the upcoming changes are going to boost earnings by 25%. At the same time, analysts expect a $2.29 increase per share by the end of this year.
On Tuesday, CSX announced an improved second quarter by 15% to $510 million or 55 cents per share. By comparison, a year ago the shares soared 47 cents, and the revenue showed $445 million. Over the last quarter, coal volume increased 7%.
However, over the last years this type of resource fell to great challenges as its rival natural gas presented better prices. On top of that, environmental concerns that grow incrementally dented the image of coal greatly.
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