Core Insights - CSX reported $3.59 billion in revenue for the quarter ended September 2025, reflecting a year-over-year decline of 0.9% and an EPS of $0.44 compared to $0.46 a year ago, with a revenue surprise of -0.22% and an EPS surprise of +4.76% [1] Financial Performance - The operating margin was reported at 30.3%, significantly lower than the estimated 65.7% by analysts [4] - Revenue from intermodal services was $527 million, exceeding the average estimate of $517.94 million, representing a year-over-year increase of +3.5% [4] - Revenue from coal was $490 million, slightly above the average estimate of $488.06 million, but showing a year-over-year decline of -11.4% [4] Volume Metrics - Volume for merchandise chemicals was 164 thousand, slightly below the average estimate of 167.59 thousand [4] - Volume for agricultural and food products was 110 thousand, surpassing the average estimate of 107.91 thousand [4] - Volume for automotive merchandise was 99 thousand, closely matching the average estimate of 99.39 thousand [4] Revenue Breakdown - Revenue from merchandise chemicals was $697 million, below the estimated $722.8 million, reflecting a year-over-year decline of -4.1% [4] - Revenue from agricultural and food products was $382 million, compared to the average estimate of $418.66 million, indicating a year-over-year change of -8.2% [4] - Revenue from automotive merchandise was $306 million, slightly below the average estimate of $310.08 million, but showing a year-over-year increase of +1.7% [4] - Revenue from forest products was $247 million, below the average estimate of $259.2 million, representing a year-over-year decline of -4.6% [4] - Revenue from metals and equipment was $224 million, exceeding the average estimate of $213.13 million, with a year-over-year increase of +7.7% [4] - Revenue from fertilizers was $126 million, below the average estimate of $139.15 million, but showing a year-over-year increase of +6.8% [4] Stock Performance - CSX shares have returned +10.6% over the past month, outperforming the Zacks S&P 500 composite's +0.9% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - CSX reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.42 per share, but down from $0.46 per share a year ago, resulting in an earnings surprise of +4.76% [1][2] - The company generated revenues of $3.59 billion for the quarter ended September 2025, which was 0.22% below the Zacks Consensus Estimate and a decrease from $3.62 billion year-over-year [2] - CSX shares have increased by approximately 12.3% since the beginning of the year, compared to a 13.4% gain in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $3.61 billion, and for the current fiscal year, it is $1.65 on revenues of $14.21 billion [7] - The trend of estimate revisions for CSX was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Transportation - Rail industry, to which CSX belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, suggesting potential challenges for stocks in this sector [8] - Another company in the same industry, Norfolk Southern, is expected to report quarterly earnings of $3.18 per share, reflecting a year-over-year decline of 2.2%, with a revenue estimate of $3.09 billion, up 1.3% from the previous year [9][10]

Financial Data and Key Metrics Changes - Reported operating income for Q3 was $1.1 billion, with earnings per share at $0.37, including a $164 million impairment charge [17][18] - Adjusted revenue decreased by approximately $30 million, or 1%, due to unfavorable mix and coal pricing, despite a 1% volume growth [17][18] - Adjusted expenses increased by 3%, with interest and other expenses rising by $19 million compared to the previous year [17][18] Business Line Data and Key Metrics Changes - Merchandise revenue and volume decreased by 1%, with minerals volume and revenue up 8% and 12% respectively [11][12] - Coal revenue declined by 11% on a 3% lower total volume, while utility coal tonnage increased by 22% year over year [13][15] - Intermodal revenue increased by 4% on a 5% volume increase, benefiting from strong growth with key customers [10][15] Market Data and Key Metrics Changes - Business conditions are mixed, with customers facing challenges from shifting trade policies and weak global commodity prices [11] - The domestic coal market shows steady trends, while the chemical and forest product markets are impacted by tariffs and production rationalization [12][13][15] Company Strategy and Development Direction - The company aims to be the best-performing railroad in North America, focusing on financial performance, safety, and customer service [4][5] - Completion of major infrastructure projects like the Howard Street Tunnel and Blue Ridge Subdivision is expected to enhance capacity and resiliency [10][11] - The company is actively pursuing strategic opportunities to create value for shareholders while maintaining strong customer relationships [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operational performance and ability to navigate mixed economic conditions [25] - There is optimism regarding the potential for volume growth and improved margins in the upcoming quarters, driven by operational efficiencies [18][25] - The company is focused on building a high-performance culture and capitalizing on strategic opportunities as they arise [25][46] Other Important Information - Year-to-date free cash flow is $1.1 billion, with over $2 billion returned to shareholders [23] - The company maintains a full-year CAPEX guidance of $2.5 billion, excluding the Blue Ridge project [24] Q&A Session Summary Question: How does the company position itself against peers pursuing mergers? - Management emphasized the importance of running the company effectively to create value and be prepared for strategic opportunities when they arise [29][31] Question: How will the completion of infrastructure projects impact the company? - Management noted that the completion of these projects sets the company up well for future growth and cost reductions [34][36] Question: What are the expectations for coal and intermodal markets? - Management expressed optimism about domestic coal demand and intermodal growth, highlighting ongoing discussions with customers [66][83] Question: What are the cash priorities for 2026? - Management indicated a focus on shareholder returns and potential investments in projects that enhance operational efficiency [90]

Financial Data and Key Metrics Changes - The third quarter reported operating income was $1.1 billion, and earnings per share were $0.37, which included a $164 million impairment charge related to goodwill [27] - Adjusted revenue decreased by approximately $30 million or 1%, while adjusted expenses increased by 3% [27][29] - Year-to-date free cash flow reached $1.1 billion, including over $850 million in cash outflows for the Blue Ridge project [33] Business Line Data and Key Metrics Changes - Merchandise revenue and volume were down 1%, with revenue per unit (RPU) flat, while minerals volume and revenue increased by 812% [19] - Coal revenue declined by 11% on a 3% lower total volume, with domestic coal business showing steady trends [22][23] - Intermodal revenue increased by 4% on a 5% volume increase, benefiting from strong growth with key customers [24] Market Data and Key Metrics Changes - Business conditions across markets are mixed, with customers facing uncertainty from shifting trade policies and weak global commodity prices [18] - Fertilizer volume rebounded due to improved production, driving 7% growth in the quarter [20] - Forest products and chemical markets saw a 7% volume decline compared to the prior year, impacted by broader market softness and tariffs [21] Company Strategy and Development Direction - The company aims to be the best-performing railroad in North America, focusing on financial performance, safety, customer service, and operational efficiency [8][9] - Completion of major infrastructure projects like the Howard Street Tunnel and Blue Ridge Subdivision is expected to enhance network capacity and resiliency [16][18] - The company is actively pursuing strategic opportunities to create value for shareholders while maintaining strong customer relationships [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operational performance and ability to capitalize on market opportunities despite mixed economic conditions [36] - The company anticipates continued improvements in operational efficiency and cost control, setting a positive outlook for the fourth quarter and beyond [34][36] - Management highlighted the importance of building a high-performance culture and leveraging strategic opportunities for growth [67] Other Important Information - The company remains committed to shareholder distributions, having returned over $2 billion year-to-date [33] - The completion of infrastructure projects is expected to provide a competitive edge in the market, particularly in intermodal services [18][19] Q&A Session Summary Question: How is the company positioned versus peers in light of potential mergers? - Management emphasized the importance of running the company effectively to create value and be prepared for strategic opportunities as they arise [41][43] Question: How is the company capitalizing on completed infrastructure projects? - Management noted that the completion of the Howard Street Tunnel and Blue Ridge projects positions the company well for cost reductions and increased service offerings [48][49] Question: What are the expectations for market conditions and growth drivers? - Management indicated that while some markets are facing challenges, there are opportunities for growth in intermodal and coal sectors, with optimism for future performance [85][89] Question: What are the company's priorities moving forward? - The focus is on driving best-in-class performance, building a high-performance culture, and capitalizing on strategic opportunities [67][68]

Financial Data and Key Metrics Changes - Third quarter reported operating income was $1.1 billion, and earnings per share was $0.37, including a $164 million impairment charge [17] - Adjusted revenue decreased by about $30 million, or 1%, due to unfavorable mix and coal pricing, while adjusted expenses increased by 3% [17][19] - Year-to-date free cash flow reached $1.1 billion, with over $850 million in cash outflows for the Blue Ridge project [23] Business Line Data and Key Metrics Changes - Merchandise revenue and volume were down 1%, with minerals volume and revenue up 8% and 12% respectively [11][12] - Coal revenue declined 11% for the quarter on a 3% lower total volume, while utility coal tonnage increased by 22% year over year [13][15] - Intermodal revenue was up 4% on a 5% increase in volume, benefiting from strong growth with key customers [10][16] Market Data and Key Metrics Changes - Business conditions are mixed, with customers facing uncertainty from shifting trade policies and weak global commodity prices [11] - The domestic coal market shows steady trends, while the chemical and forest product markets have faced challenges, with volume down 7% [12][70] - The intermodal market is expected to grow, particularly with the completion of the Howard Street Tunnel, which will enhance service offerings [11][80] Company Strategy and Development Direction - The company aims to be the best-performing railroad in North America, focusing on financial performance, safety, and customer service [4][5] - Completion of major infrastructure projects like the Howard Street Tunnel and Blue Ridge Subdivision is expected to enhance capacity and resiliency [10][11] - The company is actively pursuing strategic opportunities to create value for shareholders while maintaining strong customer relationships [25][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operational performance and ability to navigate mixed economic conditions [25] - The company anticipates easing year-over-year headwinds into the fourth quarter, supported by strong operational execution and cost control [18] - There is optimism regarding the coal market and potential improvements in the chemical and forest product sectors as economic conditions stabilize [70] Other Important Information - The company has returned over $2 billion to shareholders year-to-date and remains committed to shareholder distributions [23] - The company expects to maintain its capital expenditure guidance of $2.5 billion for the full year, excluding the Blue Ridge project [24] Q&A Session Summary Question: How does the company position itself against peers pursuing mergers? - The company emphasizes running its operations effectively to create value and be prepared for strategic opportunities when they arise [31][32] Question: How will the completion of infrastructure projects impact the company? - The completion of the Blue Ridge and Howard Street projects is expected to enhance operational efficiency and cost reduction, setting the stage for growth [36][37] Question: What are the company's priorities moving forward? - The focus is on driving best-in-class performance, building a high-performance culture, and capitalizing on strategic opportunities [51] Question: How does the company view the current market conditions? - The company acknowledges mixed market conditions but remains optimistic about growth opportunities, particularly in intermodal and coal sectors [70][72] Question: What are the cash flow priorities for 2026? - The company plans to prioritize shareholder returns and may consider debt reduction, depending on cash flow performance [90]

Investors looked past a 22% drop in CSX’s third quarter earnings Thursday and focused on the direction the railroad’s new CEO might take it and the possibility of any strategic deals. CEO Steve Angel promised to focus on making CSX the best-performing railroad. Without promising a merger, Angel said he would consider any strategic opportunities that make sense for shareholders. He also reminded investors that he ran industrial gas supplier Praxair for a decade before the opportunity to merge with rival Li ...

CSX Corp. (NASDAQ: CSX) reported third quarter operating income of $1.09 billion and net earnings of $694 million, or $0.37 per share. Excluding a non-cash goodwill impairment of $164 million, adjusted operating income for the quarter was $1.25 billion and adjusted net earnings were $818 million, or $0.44 per share. Earnings for the Jacksonville, Fla.-based company beat analysts’ consensus forecast of $0.42 cents per share. It was the first earnings report under new chief executive Steve Angel, who succe ...

Safety Performance - The FRA injury rate decreased by 17% year-to-date, accompanied by a 21% reduction in total injuries[14] - Injuries resulting in lost time decreased by 23% year-to-date[14] - The FRA train accident safety performance in Q3 was the best quarter since the end of 2023[14] - Human-factor accidents have improved, decreasing by 16% year-to-date[14] Operating Metrics (Q3 2025) - Velocity reached 18.9 mph[16] - Cars Online totaled 121,000[18] - Combined Intermodal Carload Trip Plan Compliance was at 87%[19] - Dwell time was 9.5 hours[21] - Car Miles per Day reached 136.6[25] - Fuel Efficiency was 0.94 Gal/kGTM[25] - GTMs / Available Horsepower was 132.5[25] Financial Performance (Q3 2025) - Revenue was $3.587 billion, a 1% decrease year-over-year[42] - Net Earnings were $694 million GAAP and $818 million adjusted, a 22% and 9% decrease year-over-year, respectively[42] - Earnings Per Share were $0.37 GAAP and $0.44 adjusted, a 20% and 4% decrease year-over-year, respectively[42] - Operating Margin was 30.3% GAAP and 34.9% adjusted, a decrease of 710 bps and 250 bps year-over-year, respectively[42] Volume & Revenue Changes (Q3 2025 YoY) - Merchandise volume decreased by 1%, with a corresponding 1% decrease in revenue[32] - Coal revenue decreased by 11%[35] - Intermodal volume increased by 4%, with a corresponding 5% increase in revenue to $527 million[38] Cash Flow and Capital Allocation (YTD Q3 2025) - Property additions totaled $1.284 billion[47] - Shareholder distributions, including buybacks and dividends, amounted to $1.785 billion[47] - Free Cash Flow before dividends was $1.066 billion[47]

Core Viewpoint - The railroad operator is experiencing a decline in export coal prices and a decrease in merchandise volume, which are partially offset by increases in other revenue sources [1] Group 1 - Lower export coal prices are impacting the company's revenue [1] - A decline in merchandise volume is also affecting overall performance [1] - Increases in other revenue are helping to mitigate the negative effects of the declines [1]

CSX Corporation (NASDAQ:CSX) traded higher in postmarket action after it led off the earnings season for the rails sector. Revenue fell 0.8% year-over-year to $3.59 billion, topping the consensus estimate by $20 million. The effects of lower export coal prices and a decline in merchandise ...