Core Insights - CSX Corporation reported mixed third-quarter 2025 results with earnings per share of 44 cents, beating the Zacks Consensus Estimate of 42 cents, but revenues of $3.59 billion missed expectations and declined 1% year over year [1][2]. Financial Performance - Adjusted operating income for the third quarter decreased significantly to $1.25 billion, with an adjusted operating margin of 34.9% [3]. - Total revenues of $3.59 billion narrowly missed the Zacks Consensus Estimate, primarily due to lower export coal prices and a decline in merchandise volume [2]. - Merchandise revenues fell 1% year over year to $2.21 billion, while intermodal revenues increased 4% to $527 million [4]. - Coal revenues plummeted 11% year over year to $490 million, with coal volumes decreasing by 3% [5]. Segment Performance - Merchandise volumes decreased by 1% year over year to $660 million, while intermodal segment volumes increased by 5% [4]. - Trucking revenues totaled $207 million, down 3% year over year, while other revenues grew significantly by 38% to $155 million [5]. Liquidity and Guidance - CSX ended the third quarter with cash and cash equivalents of $602 million, down from $933 million at the end of 2024, while long-term debt remained flat at $18.5 billion [6]. - For 2025, CSX expects total volume growth and plans to focus on operational excellence and efficiency initiatives, with capital expenditures projected at $2.5 billion [7].

Industry Overview - The Zacks Transportation - Rail industry is facing challenges such as tariff-induced economic uncertainties, persistent inflation, and supply-chain disruptions, compounded by geopolitical issues [1] - The industry has declined by 2.2% over the past year, while the broader Zacks Transportation sector has plunged 9.4%, contrasting with the S&P 500 Index's gain of 9.4% [2] Company Performance - Railroad companies like Union Pacific Corporation (UNP), Canadian National Railway Company (CNI), and Norfolk Southern Corporation (NSC) have consistently paid dividends, demonstrating a pro-shareholder stance [3] - UNP has a market capitalization of $131.80 billion, with a dividend yield of 2.43% and a payout ratio of 48%, having raised dividends for 125 consecutive years [6][8][9] - CNI, with a market capitalization of $64.08 billion, offers a dividend yield of 2.54% and a payout ratio of 47%, also showing consistent dividend growth [10][11] - NSC has a market capitalization of $56.46 billion, maintaining a dividend yield of 2.16% and a payout ratio of 45%, with a five-year dividend growth rate of 9.44% [12][13][14] Dividend and Shareholder Returns - UNP returned $3.9 billion to shareholders in 2023 through dividends ($3.2 billion) and buybacks ($0.7 billion), and plans to buy back shares worth $4.0-$4.5 billion in 2025 [9] - CNI paid dividends of C$2.07 billion and repurchased shares worth C$4.55 billion in 2023, with consistent efforts to reward shareholders [11] - NSC paid dividends worth $1.23 billion and repurchased shares worth $622 million in 2023, indicating a commitment to shareholder value [14]