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.

Not to worry, "optimistic phrases" were located:


Via Barron's

• Rail operator CSX (CSX) has been having one of those fundamental performances increasingly typical of companies acutely sensitive to economic fundamentals: conditions got worse throughout the second quarter of 2009, but as they closed out the period, those things stopped deteriorating at the pace to which they’d become painfully accustomed.
• Take its coal business: the slump in coal shipments widened significantly in the period, falling 21% in the second quarter, three times the rate of decline the rail experienced in the first quarter of the year. (that's actually horiffic and a 2nd derivative NON improvement, considering how awful 1st quarter was in the real economy) Reduced usage by electric utilities, lower natural gas prices and slumping exports all contributed to the downturn.

So things got worse in the quarter, even though managements across the land said they were seeing improvement or stabilization 3 months ago. And that's why we drove stock prices up - remember, 2nd derivative improvements? So in coal for example that improvement did not happen - yet we still drove stocks up on ANTICIPATION it would happen. When it doesn't happen what do you do?

You repeat the same language. Try try again - and one of these quarters your words will come true.

• But management said that the slide is expected to moderate in the third quarter, but without saying the trend is going to improve.

Overall

• The takeaway from the conference call would appear to be that its end markets are stabilizing at current levels. That’s good enough to allow some investors to get a little optimistic about its outlook.

So that language is not even saying there is any improvement; it's simply saying stabilization at quite possibly the worst levels of economic activity in 6-7 decades. Green shoots.

Via AP

• Railroad operator CSX Corp. said Tuesday it expects shipping demand to sink by double digits again this quarter, but not as drastically as in the second-quarter, as the company looked for signs of an economic recovery.

Again, we were wrong on last quarters "2nd derivative improvement" forecast but we'll roll out the same language this time.

• Jacksonville, Fla.-based CSX's shipping volume fell 21 percent in the April-June period, compared with 22 percent industrywide.
• The number of active train and engine workers was down 17 percent, and the number of its signature yellow and blue locomotives dropped by the same amount.
• The company didn't offer an earnings outlook, but said it now expects to get more money from raising prices this year among its existing customers -- about 75 percent of its annual business. It predicts it will now be able to increase prices by 6.6 percent this year, compared with a previous estimate of 5 to 6 percent. (it's nice to be near monopolies, and this is why Mr. Buffet loves the rails - you can raise prices even in THIS type of environment)

So it's great for Wall Street. For Main Street? Not so much.

• Ward said that cost cuts should continue to buoy sinking demand this quarter. In the second quarter, the company slashed expenses by 27 percent from a year earlier -- mostly through labor reductions.

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Novellus ( )

Via Reuters

• U.S.