06:42 AM EDT, 10/17/2024 (MT Newswires) -- CSX (CSX) shares fell early Thursday as the company reported third-quarter results that fell short of market estimates, while the rail-based freight transportation supplier expects the impact of Hurricane Helene to be larger in the ongoing quarter than in the previous three-month period.

The company's net earnings came in at $0.46 a share for the three-month period ended Sept. 30, up from $0.41 the year before, it said late Wednesday, while the consensus on Capital IQ was for $0.48. Revenue ticked up 1% year over year to $3.62 billion, but fell short of the Street's view of $3.68 billion. The stock dropped 5.5% in premarket activity.

Growth in merchandise and intermodal volume, as well as merchandise pricing gains, were partially offset by a decrease in coal revenue, lower fuel surcharge and a reduction in other revenue, according to the company. Hurricane Helene, which made landfall in Florida at the end of September, impacted revenue by $10 million to $15 million at the end of the quarter, Chief Financial Officer Sean Pelkey said on an earnings call, according to a Capital IQ transcript.

"Our aim was to grow volume, revenue and the operating margin compared to last year, and that is exactly what we delivered," Chief Executive Joe Hinrichs said on the call. "This quarter, we had to adapt and respond to significant weather events, equipment issues at our coal terminal and lower diesel prices."

Revenue in the intermodal segment moved down 2% to $509 million despite a 3% increase in volume. Merchandise revenue rose 6% to $2.23 billion, buoyed by volume gains of 3% and pricing, according to Hinrichs. Coal revenue fell 7% to $553 million while trucking slipped 2% to $214 million.

Operating income increased 7% year over year to $1.35 billion. Total expenses decreased to $2.27 billion from $2.3 billion in the prior-year quarter, the company said.

"It appears the fourth quarter storm-related impacts will be larger than (the third quarter), with a current estimate of around $50 million," Pelkey told analysts on the call. "That includes storm recovery and rerouting costs near $20 million as well as roughly $30 million of net revenue impacts."

CSX anticipates a "slight decrease" in fourth-quarter revenue due to lower fuel and coal prices, combined with "modest" volume growth, Hinrichs said. "We estimate that lower fuel surcharge and the total effects of a slightly softer coal market will lead to roughly $200 million in revenue effects year-over-year just on their own," the CEO added.

Price: 33.53, Change: -1.94, Percent Change: -5.47