monkey in the middle?
Hedge Funds 3g Partners and TCI have secured seats for four of their nominees to CSX's board of directors.
CSX raised the dividend on their common stock to $0.22 per share. This represents a 22% increase over its former quarterly payout of $0.18.
A Federal Judge ruled that 3g Capital Partners and The Children's Investment Fund both violated securities laws in acquiring large stakes in CSX. However, both firms will be allowed to vote with their shares and could place a new board of directors. The judge claimed that any penalties must come from the SEC.
CSX announced EPS of $2.70 for 2007, and proceeded to raise expectations FY08 to the high end of $3.40-3.60/share. The company also announced that it is raising long term guidance through 2010, and sees operating income growth of 13-15%/year compounded.
Federal train regulators announced a new cost formula to better regulate rates charged by railroad companies on 8/14. The government worries that railroads have been falsely inflating shipping fees to pad bottom lines, and this new regulation aims to lower shipping prices in the long term. (http://biz.yahoo.com/ap/070814/railroad_regulation.html?.v=1)
CSX was forced to pay $114,000 to clean up the site of a March derailment. This charge caused a slight drop in the stock price but charges of this magnitude have little long-term effect.
CSX announced revenue growth of almost 5% from a year earlier even though volume was down nearly 2%. This positive report caused the stock price to go from $48.52 to $51.18
Major railroad shares began to rise ahead of what many expected to be weak quarterly reports. This rebound can be attributed to the fact that many investors are seeing positive long-term opportunity despite any short-term hiccups.