JACKSONVILLE, Fla. — Building on the momentum in its business performance and the positive outlook for freight rail transportation, CSX Corp. provided additional financial guidance at its Investor and Financial Analyst Conference in Detroit.
CSX is targeting a compound annual growth rate in earnings per share of 18 to 20 percent through 2015, supported by a compound annual growth rate for operating income of 12 to 14 percent over the same time period. Both measures use 2010 results as the base year and reflect the company’s belief in its ability to grow its business at levels that outpace general economic growth. The company also reaffirmed its goal of achieving a 65 percent operating ratio by no later than 2015.
“CSX is ideally positioned to meet the growing transportation demand in this country,” said Michael J. Ward, chairman, president and chief executive officer. “Expansion in the U.S. economy, global trade and CSX’s substantial investments in its infrastructure mean more things will move on our highly efficient freight rail network.”
At the conference, CSX said it expects to reinvest an average of 18 percent of its revenues back into its business through 2015. The company invested $8.3 billion in the five years between 2006 and 2010.
The company also said it intends to base future dividends on a payout ratio of 30 to 35 percent of earnings per share as measured on a trailing 12-month basis. CSX said it is targeting share repurchases of about $1 billion annually after its current $2 billion program is completed, which is expected to be by the end of 2012.
“Our high expectations for CSX are grounded in what we clearly see happening in the marketplace and what we know about the capability of our people, our infrastructure and our ability to bring value to customers,” said Oscar Munoz, executive vice president and chief financial officer. “We see significant opportunity to create value and are working to build on that opportunity through the balanced deployment of capital and a focus on strengthening our credit profile.”