CSX Keeps Climbing on Strong Earnings

(Update adds Tuesday stock-price movements.)

CSX(CSX Quote), the railroader, surpassed Wall Street targets with its second-quarter earnings Monday, and said that it sees indications of a bottom developing in some of the markets it services.

Investors were apparently emboldened by the news. In Tuesday trading, shares of the company rose more than 5.5% to $35.66, adding to Monday's regular-session gains of 1.6%.

The company said it earned $308 million, or 78 cents a share, down from $385 million, or 93 cents, in the year-earlier period. To account for the sale in March of the tony but bankrupt Greenbrier resort in West Virginia, CSX said its profit from continuing operations in the second quarter was 72 cents, compared with 95 cents a year ago.

Either way you look at it, CSX beat expectations by a large margin. Analysts were looking for EPS of 62 cents.

Revenue, however, still compared badly with 2008. CSX said its second-quarter top line fell 25% from a year ago to $2.2 billion. The company blamed the declines on sharply lower volumes and a lesser fuel surcharge compared with a year ago.

But CEO Michael Ward chimed in with some optimistic phrases in the company's earnings statement after the bell Monday. "While the economy continues to significantly impact our business, there are some signs that we may be seeing the bottom in many markets," he said.

The company didn't offer further details in the press release.