U.S. railroad CSX Corp (NYSE:CSX) on Tuesday reported a higher quarterly net profit on increased freight volumes and higher rates charged to customers, and announced a $2 billion share repurchase program.
Shares of CSX, the third-largest U.S. railroad, rose nearly 2 percent in after-market trading.
The Jacksonville, Florida-based company reported first-quarter net income of $442 million or 45 cents per share, an 11 percent increase over the $398 million, or 40 cents a share, it reported a year earlier.
Analysts had expected earnings per share for the latest quarter of 44 cents.
CSX reported quarterly revenue of $3.03 billion, just above the $3.01 billion it reported for the first quarter of 2014 and largely in line with the $3.02 billion predicted by analysts.
The railroad said that the growing economy had helped drive an overall increase in freight volumes of 1 percent. Higher freight volumes improved CSX&apos;s pricing power and the company got a lift from lower fuel prices. The railroad&apos;s fuel bill for the quarter was $270 million, a 40 percent decrease from the $446 million it paid a year earlier.
The railroad said those gains were partially offset by lower fuel surcharges that it uses to pass on fuel costs to customers, plus a strong U.S. dollar.
CSX said that it intended to repurchase $2 billion worth of its shares over the next 24 months.
"In this dynamic economic and business environment, CSX&apos;s core earnings remain strong," Chief Executive Michael Ward said in a statement. "Our commitment and confidence in CSX&apos;s future is underscored by the positive shareholder actions we&apos;re taking today."
CSX also said it was raising its quarterly dividend 13 percent to 18 cents a share.
In after-market trading, the railroad&apos;s shares were up 1.8 percent at $33.82.