Core Insights - CSX Corporation has designated eighteen properties across twelve states as CSX Select Sites, which are rated gold, silver, or bronze based on site characteristics evaluation [1][3] - The Select Site program aims to connect expanding companies with desirable rail-served properties, enhancing economic growth opportunities [2][3] - Four existing Select Sites have improved their readiness and received upgraded designations since the last awards in 2024 [3] Company Overview - CSX is a leading transportation company based in Jacksonville, Florida, providing rail, intermodal, and rail-to-truck transload services across various markets [7] - The company has been integral to the economic expansion and industrial development of the United States for nearly 200 years, connecting major metropolitan areas and numerous short-line railroads [7] Select Sites Details - The Select Sites include various locations such as South Coast Logistics Park in Massachusetts, Montgomery Inland Logistics in Alabama, and Eastport Logistics Park in Florida, among others [8] - The program reflects collaboration with landowners, counties, and utility partners to facilitate faster investment and job creation in local communities [3][8]

Core Viewpoint - The U.S. Supreme Court has dismissed CSX Transportation's antitrust lawsuit against Norfolk Southern Corporation, impacting the competitive landscape in the rail industry [1] Group 1 - The Supreme Court's decision reinforces Norfolk Southern's market position and may deter future antitrust claims from competitors like CSX [1] - The ruling is significant for the rail industry, as it sets a precedent regarding the legal boundaries of competition and antitrust litigation [1] - CSX's attempt to challenge Norfolk Southern's practices highlights ongoing tensions within the rail sector regarding competition and market share [1]

Summary of Key Points Core Viewpoint - The article discusses the performance of CSX shares, which have declined approximately 16% over the past three months, compared to a 13% loss for the S&P 500, indicating a negative outlook for the company [1]. Group 1: Company Performance - CSX shares have experienced a decline of about 16% in the last three months [1]. - The S&P 500 index has seen a loss of about 13% during the same period, suggesting that CSX's performance is underperforming relative to the broader market [1]. Group 2: Investment Strategy - The author employs a quantitative investment strategy that combines fundamental analysis with momentum research [1]. - A software tool has been developed to track levels of optimism and pessimism in stock prices, aiming to identify discrepancies between market perceptions and likely outcomes [1]. - The investment focus is on companies that have a higher than average chance of surprising investors in the near future [1].

Core Viewpoint - CSX Corporation reported disappointing first-quarter 2025 results, with both earnings and revenues falling short of expectations, indicating operational challenges and market uncertainties [1][3]. Financial Performance - Quarterly earnings per share were 34 cents, missing the Zacks Consensus Estimate of 37 cents, and decreased by 26% year-over-year [1]. - Total revenues amounted to $3.42 billion, missing the Zacks Consensus Estimate of $3.47 billion, and declined by 7% year-over-year [2]. - Operating income decreased by 22% year-over-year to $1.04 billion, while total expenses increased by 2% year-over-year to $2.38 billion [2]. Segmental Performance - Merchandise revenues fell by 2% year-over-year to $2.15 billion, with merchandise volumes also down by 2% [4]. - Intermodal revenues decreased by 3% year-over-year to $493 million, with segmental volumes increasing by 2% but revenue per unit decreasing by 5% [4]. - Coal revenues plummeted by 27% year-over-year to $461 million, with coal volumes down by 9% and segmental revenue per unit falling by 20% [5]. Liquidity Position - CSX ended the first quarter of 2025 with cash and cash equivalents of $1.14 billion, up from $933 million at the end of the previous quarter [6]. - Long-term debt increased to $18.5 billion from $17.8 billion in the prior quarter [6]. - The company generated $1.25 billion in cash from operating activities during the reported quarter [6]. 2025 Guidance - CSX anticipates total volume growth for 2025 despite market uncertainties and trade policy changes, with full-year revenues likely impacted by lower coal benchmarks and diesel prices [7]. - The company will focus on improving fluidity, efficiency initiatives, and labor productivity, with capital expenditures expected to remain flat year-over-year, excluding hurricane rebuild spending [7]. Industry Context - Other companies in the Zacks Transportation-Railroad industry, such as Norfolk Southern Corporation and Union Pacific Corporation, are also expected to report first-quarter earnings soon, with anticipated challenges related to inflation, high interest rates, and weak freight demand [10][12].

Core Viewpoint - CSX Corp. reported weaker-than-expected first-quarter results, with earnings and revenue falling short of analyst estimates [1][2]. Financial Performance - CSX's GAAP earnings for the quarter were 34 cents per share, missing the consensus estimate of 37 cents [1]. - Quarterly revenue was $3.42 billion, below the expected $3.46 billion, primarily due to declines in coal revenue, fuel surcharge, and merchandise volume [1]. Operational Challenges - The company faced operational challenges at the beginning of the year, which contributed to the disappointing results [2]. - CSX is addressing network constraints caused by two major ongoing infrastructure projects [2]. Analyst Reactions - Following the earnings announcement, analysts adjusted their price targets for CSX stock. B of A Securities analyst Ken Hoexter maintained a Neutral rating and lowered the price target from $33 to $30 [7]. - Stifel analyst Benjamin Nolan maintained a Buy rating but reduced the price target from $34 to $33 [7]. Market Response - CSX shares increased by 1.6% to trade at $27.79 on Thursday following the earnings report [2].

Financial Data and Key Metrics Changes - Total revenue for the quarter was $3.4 billion, down 7% from the same period last year, primarily due to lower benchmark coal prices and reduced fuel surcharge [10][44] - Earnings per share decreased by 24%, reflecting the impact of reduced revenues and network performance challenges [10][44] - Total volume decreased by 1% compared to last year, with intermodal volumes increasing by 2% [9][10] Business Line Data and Key Metrics Changes - Merchandise business saw both revenue and volume decline by 2%, while revenue per unit (RPU) increased by 1% year-over-year [30] - Coal revenue declined by 27% on a 9% lower volume, with all-in coal RPU down 20% year-over-year [36] - Intermodal revenue was down 3% despite a 2% increase in volume, with RPU lower by 5% due to lower fuel surcharge [39] Market Data and Key Metrics Changes - Fertilizer volume was up 2% compared to last year, while minerals volume decreased by 1% due to weather impacts [31][32] - Automotive production was slow to start the year, with volume and revenue declining by 7% and 8% respectively [34] - The overall market demand remained stable, with some areas showing strength, but operational challenges limited the ability to meet demand [28][31] Company Strategy and Development Direction - The company is focused on improving operational efficiency and stabilizing network performance amid ongoing infrastructure projects [6][14] - There is a commitment to enhancing customer service and maintaining strong relationships with customers to drive growth [8][28] - The company is optimistic about future growth opportunities, particularly in U.S. manufacturing, as it continues to attract new customers [42][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the first quarter represented an earnings trough, with expectations for improvement as operational challenges are addressed [45][57] - The company is committed to running a safer, faster, and more reliable railroad, recognizing the need for better outcomes moving forward [58] - Management expressed confidence in the potential for sequential improvement in performance as the year progresses [57][58] Other Important Information - The company is investing heavily in infrastructure projects, with expectations for capital expenditures to exceed $400 million for the Blue Ridge rebuild [52] - Free cash flow was stable in the first quarter, with a commitment to returning cash to shareholders [54] Q&A Session Summary Question: Can you break down the operational challenges? - Management indicated that the challenges stem from a series of significant compounding events, including severe weather and infrastructure projects, which have affected capacity [65][70] Question: Will Q2 show typical margin improvement? - Management expects Q2 results to be better than Q1, but the pace of margin improvement will depend on macro conditions and operational improvements [76][79] Question: What about lost customer contracts? - Management clarified that there have been no lost contracts, but there were missed opportunities due to operational disruptions [89][90] Question: Can you quantify the revenue opportunities? - Management noted that some revenue opportunities were perishable, but there is a significant chance to capture demand in Q2 as operations improve [102] Question: What is the outlook for coal contracts? - Management stated that coal contracts have unique pricing structures with embedded floors, and they are currently above those levels [136] Question: What is the run rate for other revenues? - Management indicated that the current run rate for other revenues is around $115 million, with some variability expected [137]

分组1 - CSX reported quarterly earnings of $0.34 per share, missing the Zacks Consensus Estimate of $0.37 per share, and down from $0.46 per share a year ago, representing an earnings surprise of -8.11% [1] - The company posted revenues of $3.42 billion for the quarter, missing the Zacks Consensus Estimate by 1.59%, and down from $3.68 billion year-over-year [2] - CSX shares have declined approximately 13.5% since the beginning of the year, compared to the S&P 500's decline of -8.3% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.45 on revenues of $3.66 billion, and for the current fiscal year, it is $1.79 on revenues of $14.55 billion [7] - The Zacks Industry Rank for Transportation - Rail is currently in the top 10% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Performance - Total revenue decreased by 7% from $3,681 million in Q1 2024 to $3,423 million in Q1 2025[14] - Earnings per share decreased by 24% from $0.45 in Q1 2024 to $0.34 in Q1 2025[15] - Net earnings decreased by 27% from $880 million in Q1 2024 to $646 million in Q1 2025[56] - Operating margin decreased by 590 basis points from 364% in Q1 2024 to 304% in Q1 2025[56] - Free cash flow before dividends remained relatively stable at $559 million in Q1 2025 compared to $560 million in Q1 2024[62,69] Volume and Operations - Total volume decreased by 1% from 1,534k units in Q1 2024 to 1,518k units in Q1 2025[12] - Intermodal volume increased by 2% from 701k units in Q1 2024 to 716k units in Q1 2025[17] - Merchandise volume decreased by 2% from 645k units in Q1 2024 to 630k units in Q1 2025[39] - Coal volume decreased by 9% from 188k units in Q1 2024 to 172k units in Q1 2025[43] Safety and Service - The company's FRA Personal Injury Frequency Index increased from 122 in Q1 2024 to 133 in Q1 2025[23] - Velocity decreased by 3% in Q1 2025 compared to Q1 2024[28]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $3.4 billion, down 7% from the same period last year, primarily due to lower benchmark coal prices and reduced fuel surcharge [10][44] - Earnings per share decreased by 24%, reflecting the impact of reduced revenues and network performance challenges [10][44] - Total volume decreased by 1% compared to last year, with intermodal volumes increasing by 2% [9][10] Business Line Data and Key Metrics Changes - Merchandise business saw both revenue and volume decline by 2%, while revenue per unit (RPU) increased by 1% year-over-year [30] - Coal revenue declined by 27% on a 9% lower volume, with RPU down 20% year-over-year [36] - Intermodal revenue decreased by 3% despite a 2% increase in volume, with RPU lower by 5% [39] Market Data and Key Metrics Changes - Fertilizer volume increased by 2%, but revenue remained flat due to a negative mix shift [31] - Automotive production was slow, with volume and revenue declining by 7% and 8% respectively [34] - Minerals volume decreased by 1%, while cement volume increased by 4% due to new production ramp-up [32] Company Strategy and Development Direction - The company is focused on improving operational efficiency and stabilizing network performance amid ongoing infrastructure projects [6][21] - There is a commitment to enhancing customer service and maintaining strong relationships with clients [8][24] - The company aims to capitalize on the long-term trend toward the expansion of U.S. manufacturing capacity [56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the first quarter represented an earnings trough, with expectations for improvement as operational challenges are addressed [45][57] - The company is closely monitoring macroeconomic conditions and trade policies, which are impacting demand and operational performance [27][28] - There is confidence in the potential for improved network performance to capture more demand in key markets [35][56] Other Important Information - The company is investing in infrastructure projects, with significant capital expenditures planned for the Blue Ridge rebuild [52][57] - Free cash flow remained stable, with nearly a billion dollars returned to shareholders in the first quarter [54] Q&A Session Summary Question: Can you break down the operational challenges? - Management indicated that the challenges stem from a series of compounding events, including severe weather and infrastructure projects, which have affected capacity [65][70] Question: Will Q2 see a typical margin improvement? - Management expects Q2 results to be better than Q1, but the pace of improvement will depend on macro conditions and operational enhancements [76][79] Question: What about lost customer contracts? - Management clarified that there have been no lost contracts, but missed opportunities due to operational disruptions [89] Question: Can you quantify the revenue opportunities? - Management noted that some revenue opportunities were perishable, but there is potential for recovery in Q2 as demand stabilizes [102] Question: What is the outlook for coal contracts? - Management stated that coal contracts have unique pricing structures, with current prices above floor levels [136] Question: What is the run rate for other revenues? - Management indicated that the current run rate for other revenues is around $115 million, with some variability expected [137]

Financial Performance - Total revenue decreased by $258 million, or 7%, year over year, totaling $3.423 billion in Q1 2025[154] - Operating income fell to $1.041 billion, a decrease of $296 million, or 22%, compared to the previous year[154] - Earnings per diluted share decreased to $0.34, down $0.11, or 24%, year over year[154] - Total volume decreased by 16 thousand units, or 1%, totaling 1,518 thousand units in Q1 2025[153] - Expenses increased by $38 million, or 2%, year over year, totaling $2.382 billion[154] - Coal revenue decreased significantly by 27%, contributing to overall revenue decline[156] - Economic Profit decreased to $320 million, down from $594 million in the previous year[182] - The operating margin decreased by 590 basis points to 30.4% compared to the prior year[154] Operational Metrics - In Q1 2025, train velocity decreased by 3% to 17.6 miles per hour, while dwell time increased by 19% to 11.5 hours compared to the prior year[190] - Intermodal volume increased, driven by higher international shipments, while domestic shipments remained flat[163] - The personal injury frequency index improved by 22% to 0.95, and the FRA train accident rate improved by 16% to 3.43 compared to the prior year[191] Cash Flow and Investments - Free Cash Flow before dividends was $559 million, slightly down from $560 million in the prior year[188] - Operating cash flows increased by $189 million year over year, despite lower cash-generating net earnings, due to $387 million of tax payments postponed from 2023[204] - CSX used $161 million more cash for investing activities, primarily due to higher property additions, including $133 million for rebuilding the Blue Ridge subdivision[204] - Planned capital investments for 2025 are expected to be approximately $2.5 billion, including over $400 million for the Blue Ridge rebuild[208] Balance Sheet - Total assets increased by $435 million, driven by a $206 million increase in cash and cash equivalents and a $200 million increase in net property[210] - Total liabilities increased by $767 million, primarily due to the issuance of $600 million in long-term debt[211] - Working capital improved by $55 million to a deficit of $401 million as of March 31, 2025, primarily due to a $206 million increase in cash[212] Financial Instruments and Risk Management - CSX has a $1.2 billion unsecured revolving credit facility, with no outstanding balances as of March 31, 2025[207] - CSX entered into two fixed-to-floating interest rate swaps to hedge interest rate risk for 10 years on $250 million of fixed rate outstanding notes due in 2055[231] - As of March 31, 2025, the fair value of these interest rate swaps was an $8 million asset included in other long-term assets[231] Risks and Challenges - The company faces risks from legislative, regulatory, and legal developments affecting transportation, including environmental regulations and taxation[225] - Competition from other freight transportation modes, such as trucking, poses a significant challenge to CSX's market position[225] - Changes in fuel prices and availability could impact operational costs and profitability[225] - The company is subject to risks associated with natural events, including severe weather and pandemics, which could disrupt operations[225] - Labor costs and difficulties in hiring and retaining qualified employees are ongoing concerns for the company[225] - The impact of inflation and commodity concentrations may affect operating conditions and costs[228] - The company’s strategic initiatives, including acquisitions, are critical for future growth and operational success[228] - The fair value of long-term debt may be influenced by changes in interest rates, necessitating the use of financial instruments for risk management[230]