$.27/Share -- Unbelievable.
Railroad giant CSX Corp. said it will take a fourth-quarter non-cash charge of 27 cents a share, due to the economic baggage from the lavish Greenbrier resort it owns in West Virginia.
Associated Press
The lavish Greenbrier resort and spa in West Virginia, shown here in 2007, is the source of a noncash charge that CSX plans to take in the fourth quarter.
In a preliminary disclosure ahead of full financial results later this month, CSX said it earned 63 cents per share in the fourth quarter. Higher overall freight charges allowed CSX to post $2.7 billion in revenue, up 4% from the fourth quarter of 2007, despite falling demand for cargo from the automobile, construction, and other industries.
Not counting the charge for the Greenbrier, the money-losing Allegheny Mountain resort the company has owned since 1980, CSX said earnings for the quarter were about 90 cents per share, a 6% increase from a year ago.
CSX and other rail operators are grappling with plummeting freight volumes. Indeed, CSX -- the country's third-largest rail company, measured by revenues -- said that in light of the worsening economy, it would no longer be giving long-term earnings guidance.
Earlier this month CSX said it was examining strategic options for the Greenbrier. The resort, which has struggled as demand for luxury hospitality services has dropped, posted a $35 million loss in 2008 and a loss of more than $15 million in 2007. CSX has tapped Goldman Sachs & Co. to help figure out what to do with the resort, whose features include a massive bunker once meant to serve as a secret nuclear bomb shelter for members of Congress.
Compounding the general downturn in the travel business, CSX has also been entangled in a continuing labor dispute at the Greenbrier. Hotel employees have been operating without a contract for nearly a year as negotiations drag on.
The resort was purchased in 1910 by the Chesapeake & Ohio Railway, which eventually became part of CSX, based in Jacksonville, Fla.
The preliminary earnings came in below analysts forecasts of 98 cents per share, according to a mean estimate by Thomson Reuters. Shares of CSX were down 0.7% to $32 in after-hours trading, after closing down 6.7% in the regular session.