Boston, MA 06/02/2014 (wallstreetpr) – Leading American company CSX Corporation (NYSE:CSX) has had tough time lately. In the first quarter of the year 2014, operating expenses of CSX increased by a huge margin of $190 million. The main reasons behind unexpected increment in CSX’s operating expenses were inflationary pressures and weather disruptions. Due to both the factors, the cost associated with the production of material increased automatically which further put pressure on expenses and increased operating expenses by a huge margin.
Increase in operating expenses has taken the operating ratio of CSX Corporation (NYSE:CSX) to a new level of 75.5%. The last recorded growth in operating ratio was 5.2% in the first quarter of the current year. Operating ratio signifies that by what percentage of company’s overall revenues, the operating expenses increase. A lower percentage of operating expenses shows higher operational and financial efficiency while a higher percentage of operating expenses shows lower efficiency which is not good at all.
As CSX Corporation (NYSE:CSX) has not had good past few months, thus the management showed its inability to meet the target operating ratio by year 2015. The announcement was made in recently held annual meeting of CSX. The main reason according to the management was but the huge expenses that have occurred recently and the higher than the expectation’s cost of raw material.
According to the CEO of CSX,” On the basis of past few months performance of CSX Corporation (NYSE:CSX), we believe that revenue per unit will not increase more than market expectations and also the expenses are a lot more than we forecasted. Hence operating ratio of our company is likely to remain higher in the next quarter. We may not be able to meet our target operating ratio in year 2015.”
Please note that CSX Corporation (NYSE:CSX) witnessed a huge growth in fuel expenses in the Q1. According to the reports, fuel expenses increased by $2 million in one quarter. All the investors will get a clear picture in coming few months period.