Financial Data and Key Metrics Changes - CSX reported a modest total volume growth of 1% in the fourth quarter, but revenue decreased by 1% due to business mix headwinds and coal pricing [7][12] - Operating income fell by 9% and earnings per share decreased by 7% year-over-year, with results impacted by approximately $50 million in expenses related to workforce optimization and technology impairments [3][8] - Fourth quarter expenses increased by $73 million, or 3%, excluding goodwill impairment charges, with a focus on driving efficiency in labor costs [9][10] Business Line Data and Key Metrics Changes - Merchandise volume and revenue both declined by 2%, with significant softness in chemicals and forest products, where volumes dropped by 6% and 11% respectively [13] - The intermodal franchise saw revenue growth of 7% year-over-year, driven by a 5% increase in volume, indicating strong performance in this segment [14] - Coal business volume increased by 1% year-over-year, with domestic tonnage up by 6% due to rising power demand and higher natural gas prices, while export tonnage declined by 3% [14][15] Market Data and Key Metrics Changes - The industrial chemicals market remains weak, and many customers are controlling freight spending due to inflation and tariff pressures [13] - The housing market is expected to see a modest decline in starts, impacting the automotive market and overall commodity demand [16] - Infrastructure project activity is driving demand for materials such as cement and aggregates, which is a positive for CSX's merchandise volumes [16] Company Strategy and Development Direction - CSX is focused on delivering stronger performance through cost structure adjustments and operational efficiencies, aiming for year-over-year operating margin expansion of 200-300 basis points in 2026 [20][21] - The company plans to maintain capital expenditures below $2.4 billion, prioritizing investments in safety, reliability, and growth projects [21] - CSX is preparing for potential opportunities arising from industry mergers while emphasizing the importance of running the business effectively in the interim [50][51] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging year with subdued demand and limited growth opportunities, but remains committed to improving service levels and operational efficiency [3][4] - The near-term outlook for key markets remains soft, with expectations of low single-digit revenue growth based on flat industrial production and modest GDP growth [20] - Management is optimistic about the potential for growth in 2026, particularly in intermodal and domestic utility segments, despite ongoing market uncertainties [18][19] Other Important Information - The company has identified over 100 diverse savings initiatives aimed at reducing non-labor spending and improving operational efficiency [10][46] - CSX is focused on enhancing its pricing strategies to ensure pricing growth exceeds cost inflation in 2026 [25][26] Q&A Session Summary Question: What is the base operating ratio for 2025 and how does pricing compare to cost inflation? - The base operating ratio for 2025 excludes goodwill charges, and management is optimistic about achieving pricing above cost inflation in 2026 through new pricing structures [25][26] Question: Can you provide details on the 200-300 basis point guidance for improvement? - The guidance includes unique charges from 2025, and management expects significant productivity improvements driven by cost optimization initiatives [29][30] Question: What are the expectations for revenue growth in 2026? - Revenue growth is expected to be low single-digit, with modest volume growth anticipated, influenced by market conditions and pricing strategies [33][34] Question: How is CSX preparing for upcoming storms and operational challenges? - CSX is better prepared for storms this year, with improved network conditions and proactive measures in place to mitigate disruptions [38][39] Question: How is the company positioning itself amid industry mergers? - CSX is focused on running the business effectively while preparing for potential opportunities arising from industry consolidation [50][51] Question: What is the outlook for coal revenue per unit (RPU)? - Coal RPU is expected to stabilize, with a mix of lower RPU segments impacting overall revenue growth [54][57]

Core Insights - The railroad operator experienced a decline in merchandise volume and export coal revenue, which negatively impacted overall performance despite increases in merchandise and intermodal prices, intermodal volume, and fuel surcharge revenue [1] Summary by Categories Revenue Performance - Lower merchandise volume and export coal revenue were significant factors affecting the company's revenue [1] - Increases in merchandise and intermodal prices contributed positively to revenue [1] - Fuel surcharge revenue also saw an increase, which partially offset the declines [1] Volume Analysis - The company faced a decrease in merchandise volume, which is a critical metric for assessing operational efficiency [1] - Intermodal volume increased, indicating a shift in transportation preferences or demand [1]

Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the company's SEC reports, accessible on the SEC's website at www.sec.gov and the company's website at www.csx.com. 2025 FOURTH QUARTER EARNINGS CONFERENCE CALL 2025 FOURTH QUARTER CONFERENCE CALL 1.22.2026 Forward Looking Disclosure This information and other statements by the company may contain forward-looking statements within the meaning of the Priva ...

Core Viewpoint - CSX Corp. reported its fourth quarter earnings, showing a decline in both revenue and earnings per share, which missed market expectations, yet the stock price increased in after-hours trading [1][2]. Financial Performance - Quarterly earnings were reported at 39 cents per share, missing the consensus estimate of 42 cents [2]. - Revenue for the quarter was $3.51 billion, falling short of the Street estimate of $3.54 billion and down from $3.540 billion in the same period last year [2]. Revenue Drivers - The decline in revenue was attributed to lower merchandise volume and reduced export coal revenue, which was partially offset by higher pricing in merchandise and intermodal, an increase in intermodal volume, and higher fuel surcharge revenue [3]. - CEO Steve Angel noted that the results reflect a subdued industrial demand environment and adjustments made to the company's cost structure [3]. Future Outlook - The company emphasized its strong operational foundation and plans to improve financial performance by focusing on productivity, cost control, and capital discipline while maintaining safe and reliable service [4]. - Following the earnings report, CSX stock rose by 5.79% to $37.85 in after-hours trading [4].

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Financial 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]

Core Viewpoint - CSX Corp. reported fourth quarter 2025 operating income of $1.11 billion and net earnings of $720 million, reflecting a challenging industrial demand environment and cost structure adjustments [1][8]. Fourth Quarter Financial Highlights - Revenue for the fourth quarter totaled $3.51 billion, a decrease of 1% year-over-year, impacted by lower merchandise volume and reduced export coal revenue, despite higher pricing in merchandise and intermodal [8]. - Operating income was $1.11 billion, with an operating margin of 31.6%, compared to 31.3% in the previous year [8]. - Earnings per share (EPS) was $0.39, down from an adjusted EPS of $0.42 in the prior year [8]. - The fourth quarter results included approximately $50 million in severance and technology rationalization expenses, affecting EPS by $0.02 [1][8]. Full Year 2025 Financial Highlights - Total revenue for 2025 was $14.09 billion, with operating income of $4.52 billion [8]. - Adjusted operating income, excluding a $164 million goodwill impairment charge, was $4.69 billion, resulting in an operating margin of 32.1% and an adjusted operating margin of 33.2% [8]. - Full year EPS was reported at $1.54, with an adjusted EPS of $1.61 [8]. Management Commentary - The CEO emphasized the company's strong operational foundation and commitment to improving financial performance in 2026 through productivity, cost control, and capital discipline [1].

Group 1 - CSX Corporation is set to release its fourth-quarter earnings results on January 22, with analysts expecting earnings of 41 cents per share, a decrease from 42 cents per share in the same period last year [1] - The consensus estimate for CSX's quarterly revenue is $3.54 billion, unchanged from the previous year [1] - CSX reported better-than-expected third-quarter financial results on October 16 [1] Group 2 - CSX shares increased by 2.9% to close at $36.53 on Wednesday [2] - Benzinga provides access to the latest analyst ratings for CSX, allowing users to sort by various criteria [2]

Group 1 - The Class 1 railroad sector is currently experiencing a pause in stock market activity due to weakness in freight transportation and ongoing merger discussions involving Union Pacific [1] - The focus on sustained profitability is emphasized, highlighting the importance of strong margins, stable and expanding free cash flow, and high returns on invested capital as reliable drivers of returns [1] Group 2 - The article does not provide any specific financial data or performance metrics related to the companies mentioned [2][3] - There are no investment recommendations or advice given regarding the suitability of investments in the companies discussed [2][3]

Core Viewpoint - Analysts project that CSX will report quarterly earnings of $0.41 per share, reflecting a 2.4% decline year over year, with revenues expected to be $3.54 billion, indicating no change from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate has been revised downward by 3.9% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts forecast 'Revenue- Coal' to reach $481.51 million, a decrease of 3.5% year over year [5]. - 'Revenue- Intermodal' is expected to be $554.16 million, reflecting a year-over-year increase of 5.4% [5]. - 'Revenue- Merchandise- Fertilizers' is projected at $137.18 million, indicating a 9.7% increase year over year [5]. - 'Revenue- Merchandise- Chemicals' is estimated to be $698.20 million, showing a decline of 1.4% from the prior year [6]. Operating Metrics - The estimated 'Operating Margin' is projected to be 67.2%, significantly higher than the year-ago figure of 31.3% [6]. - 'Revenue per unit - Intermodal' is expected to be $707.85, slightly up from $705.00 in the same quarter last year [6]. Volume Estimates - 'Volume - Merchandise - Automotive' is expected to be 92.58 thousand, down from 96.00 thousand year over year [7]. - 'Volume - Merchandise - Minerals' is projected at 87.05 thousand, compared to 88.00 thousand last year [7]. - 'Volume - Coal' is estimated at 180.65 thousand, slightly up from 179.00 thousand in the previous year [7]. - 'Volume - Merchandise - Fertilizers' is expected to reach 47.64 thousand, an increase from 44.00 thousand year over year [8]. - 'Volume - Merchandise - Metals and Equipment' is projected at 63.03 thousand, consistent with last year's figure of 63.00 thousand [8]. - 'Volume - Merchandise - Agricultural and Food Products' is estimated at 115.31 thousand, down from 116.00 thousand year over year [9]. Stock Performance - CSX shares have returned -0.9% over the past month, contrasting with the Zacks S&P 500 composite's +2% change, and the company holds a Zacks Rank 3 (Hold), indicating it is expected to mirror overall market performance [9].