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Jul 14, 10:12 AM EDT

CSX sees profits falling through 2016 as volume slows


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AP Photo/Patrick Semansky

OMAHA, Neb. (AP) -- CSX believes profits will decline for rest of the year as volume continues to slow.

The railroad reiterated a dreary outlook for the year and bleak long-term prospects for coal demand Thursday.

CSX said Wednesday that second-quarter profit tumbled 20 percent to $445 million with volume sliding 9 percent. It still beat Wall Street expectations, but that's because it's slashing costs.

Chairman and CEO Michael Ward says the railroad is operating in a challenging economic environment.

CSX Corp. expects volume to decline in the mid-to-high single digits in the third quarter.

The railroad still plans to up its capital spending by $300 million, to $2.7 billion, so it can avoid financing charges on some locomotive purchases it originally planned to complete next year.

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