Company Overview - CSX Corp. is a premier transportation company based in Jacksonville, Florida, providing rail, intermodal, and rail-to-truck transload services across various markets including energy, industrial, construction, agricultural, and consumer products [3] - The company has been integral to the economic expansion and industrial development of the United States for nearly 200 years, connecting major metropolitan areas in the eastern U.S. and linking over 240 short-line railroads and more than 70 ports [3] Upcoming Event - Sean Pelkey, Executive Vice President and Chief Financial Officer of CSX, will address the Bank of America Industrials, Transportation & Airlines Key Leaders Conference in New York on May 13 at 8 a.m. Eastern time [1] - The address will be broadcast live via webcast, with a replay available after the event [2]

Core Points - CSX Corporation has ratified new five-year collective bargaining agreements with the Brotherhood of Railroad Signalmen and the International Brotherhood of Boilermakers, Iron Ship Builders, Forgers & Helpers [1][2] - The agreements cover 54 percent of CSX's unionized workforce and include improved wages, health care, and paid time off benefits [2] - CSX aims to reach similar agreements with the remaining national rail unions representing Trainmen/Conductors and Locomotive Engineers [3] Company Overview - CSX is a premier transportation company based in Jacksonville, Florida, providing rail, intermodal, and rail-to-truck transload services across various markets [4] - 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 rural communities [4]

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].

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 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]