CSX Corp (NASDAQ: CSX) reported a 4% decline in earnings for the third quarter of 2019 as weakness in coal and intermodal dragged revenues lower. The bottom line exceeded analysts’ expectations while the top line came in line with consensus estimates.

Net income declined by 4% to $856 million while earnings per share rose by 3% to $1.08 on lower average shares outstanding.

CSX Q3 profit drops 4% but beats estimates

Revenue fell by 5% to $2.98 billion. This was due to intermodal and coal volume decreases, lower other revenue and decreases in fuel recovery, partially offset by pricing gains across nearly all markets and favorable mix.

Looking ahead into the full year 2019, the company expects revenue to decline 1% to 2%. The company maintains a sub-60% operating ratio expectation. Capital expenditures are still anticipated to be in the range of $1.6 billion to $1.7 billion.

For the third quarter, merchandise volume remained unchanged from last year. This was due to weakness in natural gas liquids and fly ash, passenger car, pulpboard, and metals shipments. This was offset by gains in feed grain and ingredients, sweeteners and oils and ethanol, higher shipments for construction and paving projects, and volume gains on short-haul phosphate shipments.

Coal volume declined by 1% due to lower domestic shipments of utility coal as a result of continued competition from natural gas. This also includes lower international shipments of both thermal and metallurgical coal as global benchmark prices declined.

Read: Fastenal Q3 earnings review

Expenses decreased by 8% year-over-year, primarily driven by efficiency gains as well as volume savings and lower fuel prices, partially offset by inflation. Fuel expense decreased by 17% due to a 13% price decrease, record fuel efficiency and lower volume.

Operating performance remained strong in the third quarter as train velocity improved 13% to record levels while car dwell remained relatively stable near record levels. CSX remains focused on executing the operational plan to deliver further service gains, improve transit times and drive asset utilization while controlling costs.

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