What's going on?

The freight railway industry is, in many ways, the circulatory system of an economy � which is why better-than-expected results on Thursday from one of America�s biggest railway operators are good news for the global economy too!

What does this mean?

CSX, which controls most of the railroads in the eastern United States, beat Wall Street�s expectations when it reported that its revenues in the most recent quarter jumped almost 10% versus last year � a big amount given the US economy is growing only around 2%.

Why should I care?

For the stock: Investors are bullish on the prospects of a turnaround under CSX�s new boss.

CSX recently hired an expert in reviving railway companies to be its new CEO. His track record of keeping the trains on time, cutting costs and raising profits has already boosted investors� optimism � the stock is up almost 80% in the past year. He�s only just taken over, so he probably shouldn�t be credited with the most recent quarter�s strong financial performance. For investors, however, it�s good news that the so-called �turnaround artist� is inheriting a company that already seems to have regained some momentum.

The bigger picture: More railway activity can be a sign of an improving economy.

When economic growth improves, it makes sense that more stuff would get shipped by train: demand for raw materials such as coal and oil increases and more goods from container ships are transported from ports to stores. As such, CSX�s results could be a signal that the US economy is getting stronger, despite some suggestions to the contrary. It�s also good news, to some extent, for the global economy, since a sizeable chunk of CSX�s freight is destined for other countries (and more freight suggests greater global demand).