CEO of railroad giant CSX says the economy is the 'most puzzling' he's seen as stock plummets
CSX is taking a hit from a "softer industrial environment" executives say and so it reported disappointing second-quarter earnings and a slashed revenue forecast.

Foote has worked in the railroad industry for more than 40 years and has been CEO of CSX since 2017.

"Both global and U.S. economic conditions have been unusual this year, to say the least, and have impacted our volumes. You see it every week in our reported carloads," Chief Executive James Foote said on a conference call Tuesday after the earnings report. "The present economic backdrop is one of the most puzzling I have experienced in my career."

The CEO of giant East Coast railroad operator CSX is sounding alarm on the U.S. economy as it weighs on the company's shipping volumes.

The company said Tuesday after the bell that it earned $1.08 per share in the second quarter, below the $1.11 earnings per share Wall Street analysts were expecting, according to Refinitiv. Revenue also fell short, with $3.06 billion reported versus the estimate of $3.14 billion. Earnings per share rose year over year from $1.01 while revenue declined from $3.1 billion.

CSX said it expects revenue to fall as much as 2% in 2019, well below a previous forecast of an increase of 1% to 2%.

Shares of CSX tanked more than 10% on Wednesday, posting their worst day since 2008.

"On the domestic utility side, our volumes are down relative to our expectations driven by continued lower natural gas prices," Mark Kenneth Wallace, executive vice president of CSX, said on the earnings call. "On the merchandise ... there are signs of slowing economic conditions in both IDP and GDP for Q3 and Q4, pointing to a less robust economy in the second half."

"We've obviously seen evidence of this in our own business, and now see a softer industrial environment,with signs in our automotive, chemicals and metals segment," Wallace said.

CSX also lost a big customer in the energy industry after Philadelphia Energy Solutions shut down the largest refinery on the East Coast due to an explosion last month. The refinery accounted for 1% of CSX's annual shipping volume, the company said.

Before the earnings report, CSX had a stellar performance this year with its stock surging a whopping 28%. But like other big transports, CSX is starting to feel the pain from the ongoing trade war between the U.S. and China.

"Obviously, what would help in the back half would be a resolution or clarity on trade tariffs ... but that is obviously beyond our control," Wallace said.

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