By Sean Froelich

CSX Corp., a Jacksonville Florida train transportation company, reported an 11 percent increase in net income in the first quarter, outperforming analyst expectations.

For the quarter ended March 27, net income rose to $442 million from $398 million and earnings per share rose to $0.45 from $0.40. Revenue slightly increased from $3.01 billion to $3.03 billion. CSX said the increases were due to low natural gas prices as well as improved pricing.

Analysts had expected net income of $431.4 million which was 2.4 percent below the reported outcome and estimated earnings per share of $0.44.

“The strength and diversity of CSX’s demand base remains their strength,” said a first-look report from the Stifel Equity Research Group in Baltimore, Maryland. The Stifel report showed that 12 of 22 major CSX commodity carloads, including petroleum and fracking sand recorded growth.

“With continuing broad-based demand for freight transportation, we see better pricing vibrancy than in previous years,” CEO Michael Ward said during a conference call with analysts. Ward also said that CSX is expected to pursue growing markets to off-set weakening coal exports.

CSX also experienced unfavorable trends in paper and newsprint demand and in the steel market. However, CSX has strengthened through demand increases in the construction market and frozen food and municipal waste shipments.

“We expect the positive trends we’ve seen over the past few weeks to gain momentum in the second quarter and accelerate in the second half of the year as we progress towards the record level of service we saw in 2012 and 2013,” Ward said about the future.

CSX also announced a dividend increase of 13 percent, rising from $0.16 to $0.18 starting in the second quarter, and a $2 billion stock buy-back program over the next 24 months.

Shares of CSX fell $0.35 to close at $32.86 Wednesday.