CSX (CSX) is off to a fast start under new CEO Hunter Harrison as its shares closed up more than 5 percent after the largest railroad in the eastern U.S. reported first-quarter earnings that comfortably topped Wall Street's expectations and said profit would jump 25 percent this year.
The Jacksonville, Florida-based company posted earnings per share of 51 cents Wednesday, beating the Thomson Reuters estimate of 43 cents per share. Revenue, expected by analysts to ring in at $2.76 billion, was $2.87 billion.
Five-day performance of CSX
Early Thursday, the company also revised its guidance for 2017, saying that investors can expect 25 percent earnings per share growth over the 2016 figure of $1.81. That would mean earnings of $2.26 per share, surpassing the Street's expectation for $2.09 per share.
The stock also was boosted by news that the company would increase its quarterly dividend by 11 percent and initiate a billion-dollar share repurchase program.
Executives credited CSX's success and improved outlook to its Precision Scheduled Railroading model under Harrison, which it says will streamline every process of rail transportation. Think of it as lean manufacturing for the rail industry.
"Although we are just in the beginning phase of making changes to our network, we are off to a great start," said Harrison, who is also president of CSX. "These changes are critical to driving strong, sustainable service for our customers and superior value for our shareholders."
CSX named Harrison CEO in March on the urging of an activist after a tough battle with the fund Mantle Ridge last year.
With the day's moves, shares of CSX are up more than 63 percent in the past six months.
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