By Paul Ziobro and Corrie Driebusch
The activist that shook up CSX Corp. has wound down most of its investment in the railroad operator, marking an end to a three-year saga that helped spur a massive overhaul of the U.S. railroad industry.
Paul Hilal's investment vehicle, Mantle Ridge LP, has sold off nearly all of its $1 billion position in CSX, according to securities filings. About 4.7 million shares were bought back by the railroad.
Mr. Hilal retains ownership of about 3.4 million shares of CSX, according to a regulatory filing, and he will continue to serve as a director and vice chairman of the company's board.
Shares of CSX have roughly doubled since January 2017 when The Wall Street Journal reported that Mantle Ridge would mount a campaign to shake up transform the railroad company.
A CSX spokesman declined to comment on the stock sale.
Mr. Hilal launched a brief boardroom battle to install railroad veteran Hunter Harrison as the CSX's CEO. Mr. Harrison had previously turned around operations at two large Canadian railroads, including once with the backing of William Ackman's Pershing Square Capital Management, where Mr. Hilal previously worked.
Though Mr. Harrison was 72 years old, had battled health problems and was nearing retirement at Canadian Pacific Railway Co., CSX agreed to pay about $84 million to bring him on board as CEO.
The plan was for Mr. Harrison to implement his so-called precision scheduled railroading strategy, which focuses on running fewer, longer trains on tighter schedules and removing unnecessary steps like sorting railcars. Mr. Harrison immediately went to work by closing facilities, idling hundreds of locomotives and laying off thousands of employees.
The changes were disruptive at CSX and across the broader U.S. freight-railroad network, causing widespread congestion and shipping problems. Federal regulators summoned Mr. Harrison to Washington for hearings.
Mr. Harrison, who often used an oxygen tank as he battled unspecified health problems, died suddenly just nine months into the turnaround.
Eventually, the gridlock cleared and CSX began operating a leaner railroad more nimbly. Profit rose and the railroad's operating ratio, which shows how much revenue is consumed by operating expenses, where a lower figure is better, fell dramatically.
Last week, CSX posted a 4% increase in quarterly profit, even as revenue fell 5%, as cost cuts helped prop up income. The operating ratio came in at 56.8%, a new low for the railroad.
The financial success has prompted other railroads, including Kansas City Southern, Norfolk Southern Corp. and Union Pacific Corp., to enact similar turnaround strategies modeled after Mr. Harrison's work.
Write to Paul Ziobro at Paul.Ziobro@wsj.com and Corrie Driebusch at email@example.com