TEL AVIV (MarketWatch) – CSX Corp., expressing confidence in its rail and inter-modal transportation business, estimated that first-quarter earnings would rise 42% to 48%. It also lifted its longer-term outlook, increased its quarterly dividend 20% and said it would buy back as much as $3 billion of shares by the end of 2009.
Separately, the Jacksonville, Fla., company (CSX: news) said it filed a lawsuit, alleging that two hedge funds, which are planning a proxy fight to name directors to the board, violated federal securities laws.
For the first quarter, CSX expects to earn 74 cents to 77 cents a share, compared with 52 cents in the year-earlier period. The company sees earnings of $3.40 to $3.60 a share for 2008, against $2.74 from continuing operations in 2007. That’s a rise of 24% to 31%. The latest estimates for the quarter and year include a 4-cent gain from a sale of real estate.
A survey of analysts by FactSet Research produced consensus estimates of 63 cents for the quarter and $3.04 for the year.
The higher estimates for the quarter and year reflect “resiliency” within CSX’s diverse businesses, “strong pricing resulting from customer-service improvements and greater productivity and efficiency” in operations, CSX said.
The quarterly dividend rises to 18 cents a share from 15 cents, payable June 13 to holders of record May 30.
And as for the buyback, the board added $2.4 billion to the $600 million remaining on CSX’s previous authorization. The $3 billion amounts to about 15% of CSX’s current market capitalization.
Through 2010, CSX expects earnings per share to grow at a compounded rate of 18% to 21% from the 2007 base, excluding share buybacks. It earlier had estimated this growth at 15% to 17%.
Legal action
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