CSX(US:CSX)2026-01-22 21:01Financial Performance - Fourth quarter 2025 revenue totaled $3.51 billion, a decrease of 1% year-over-year, primarily due to lower merchandise volume and reduced export coal revenue[7] - Operating income for the fourth quarter was $1.11 billion, with an operating margin of 31.6%, compared to 31.3% in the same quarter of 2024[7] - Net earnings for the fourth quarter were $720 million, or $0.39 per share, reflecting a slight increase from $733 million, or $0.38 per share, in the prior year[7] - For the full year 2025, revenue reached $14.09 billion, while operating income was $4.52 billion, resulting in an operating margin of 32.1%[7] - Adjusted operating income for the full year was $4.69 billion, excluding a $164 million goodwill impairment charge[7] - Full year adjusted EPS was $1.61, compared to $1.79 in 2024, indicating a decrease of 14%[7] - Net earnings for the year ended December 31, 2025, were $2,889 million, a decrease from $3,470 million in 2024[19] - Net cash provided by operating activities decreased to $4,613 million in 2025 from $5,247 million in 2024[19] - Free Cash Flow (FCF) for the year ended December 31, 2025, was $1,789 million, a decrease from $2,784 million in 2024, reflecting a decline of approximately 35.8%[74] - Net Cash Provided by Operating Activities for 2025 was $4,613 million, down from $5,247 million in 2024, indicating a decrease of about 12.1%[74] Expenses and Costs - The company incurred approximately $50 million in severance and technology rationalization expenses during the fourth quarter[2] - Goodwill impairment charges amounted to $164 million in 2025, following a $108 million charge in 2024[24] - Labor and fringe expenses increased by $47 million in the fourth quarter of 2025 compared to the same period in 2024[42] - The company incurred $31 million in employee separation costs and $32 million in increased incentive compensation costs primarily due to prior year adjustments[46] Assets and Liabilities - The company reported total assets of $43.68 billion as of December 31, 2025, an increase from $42.76 billion in 2024[17] - Total liabilities increased slightly to $30.52 billion in 2025, compared to $30.26 billion in 2024[17] Operational Metrics - Total merchandise volume decreased by 2% to 2,594 thousand units in 2025, while intermodal volume increased by 4% to 2,995 thousand units[27] - Total coal tonnage for the year ended December 31, 2025, was 81 million tons, a decrease of 2% from 82.7 million tons in 2024[38] - Total gross ton-miles decreased by 2% to 94.6 billion in Q4 2025 compared to 96.1 billion in Q4 2024[50] - Total revenue ton-miles remained stable at 48.4 billion in Q4 2025, slightly up from 48.3 billion in Q4 2024[50] Safety and Efficiency - The personal injury frequency index improved by 39% to 0.66 in Q4 2025, and the FRA train accident rate improved by 47% to 2.04, highlighting the company's commitment to safety[49] - On-time originations improved to 78% in Q4 2025 from 71% in Q4 2024, while on-time arrivals increased to 67% from 61%[50] - The company reported a 7% increase in train velocity to 19.6 miles per hour and a 13% improvement in dwell time to 9.8 hours compared to Q4 2024[48] Future Outlook - CSX aims to improve financial performance in 2026 by focusing on productivity, cost control, and capital discipline[2] Shareholder Returns - The company repurchased 3 million shares in the fourth quarter of 2025 at an average cost of $35.37 per share, totaling $112 million[22] Fuel and Consumption - Fuel surcharge revenue for the fourth quarter of 2025 was $243 million, up from $221 million in the same quarter of 2024[32] - Estimated locomotive fuel consumption decreased to 91.1 million gallons in Q4 2025 from 94.1 million gallons in Q4 2024, while total locomotive fuel expense increased slightly to $226 million from $224 million[45] - The company reported a total fuel expense of $270 million in Q4 2025, slightly up from $266 million in Q4 2024[45] Capital Expenditures - Property Additions for 2025 amounted to $2,902 million, compared to $2,529 million in 2024, representing an increase of approximately 14.7%[74] - Proceeds and Advances from Property Dispositions increased slightly to $78 million in 2025 from $66 million in 2024, marking an increase of about 18.2%[74] Financial Metrics - Economic profit for 2025 was reported at $1,621 million, down from $2,341 million in 2024, indicating a decrease in returns over the cost of capital[68] - The capital charge remained consistent at 8% for both years, calculated based on gross operating assets[70] - The tax percentage rate was maintained at 15% for both periods presented, applied to operating income and other specified items[69] - Non-interest bearing liabilities totaled $75 million in commercial paper outstanding as of June 30, 2025, with no other periods showing outstanding amounts[69] - Gross operating assets reflect an average of the year-to-date quarters reported for each year presented, providing a basis for financial performance evaluation[70] - FCF is considered a supplemental measure for investors, highlighting cash available for dividends, share repurchases, or debt reduction[72] - The company emphasizes that FCF should be viewed in conjunction with cash provided by operating activities, not as a substitute[72]