CSX, the large railroad transportation company, posted first quarter earnings after the bell on Tuesday, beating profit and revenue estimates despite a weak coal market.

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The primary factor in the decline in stock price for the two firms was the weak demand for coal freight services, a trend which will affect CSX in Q4 2012 and will likely to do so over the next few quarters.

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American demand for this type of metallurgical coal has been relatively weak recently, says Macquarie analyst Curt Woodworth.

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Coal revenues declined 10% on the back of a weak market and cheap natural gas prices, as shares in companies in the sector including Peabody energy have taken a beating.

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Closures, combined with weak demand for electricity nationwide tied to the slow economy, have translated into less overall US demand for coal.

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