Working on the railroad is profitable these days. More cost-effective than trucking, railroads are also gaining steam from a stronger economy.

CSX Corp. (CSX) is no exception. One of the country’s biggest railroads, CSX serves major urban hubs on the East Coast, along with large ports. Its 21,000 miles of track run in 23 states, Washington D.C., and parts of Canada.

Shipments are growing in three areas: merchandise, intermodal (connecting ports and trucks), and coal. Fueled by these factors, CSX’s first-quarter revenues rose 13 percent to $2.8 billion. Earnings rose 36 percent in the quarter.

To mark its good fortune, CSX rewarded shareholders with a 3-for-1 stock split, 38 percent quarterly dividend hike and $2 billion share buyback program.

Part of CSX’s success lies in squeezing costs. First-quarter operating income rose 22 percent to $773 million and the company’s aiming for a 65 percent operating margin by 2015.

But CSX isn’t finished yet. It expects to turn out 20 percent earnings growth annually until 2015. Over $8.3 billion has been folded back into the business over a five-year time span to improve efficiency.

Keep on chugging

Analysts like CSX’s momentum. Of the 32 analysts listed on Yahoo Finance, 11 have strong buy recommendations and 13 have buys, with only 8 holds.

Dahlman Rose analysts are equally bullish on CSX. They’ve set a $90 price target, citing a well-capitalized balance sheet and growing company segments. That would represent a 19 premium over recent trading action.