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Railway giant CSX Corp delivered worse than expected Q2 earnings. Favorable mix and pricing gains across most markets were more than offset by intermodal volume decreases and lower other revenue. $CSX was down over 6% on the release

CSX Railway 

CSX Corporation NASDAQ: CSX Reported Earnings After Close Tuesday

$1.08 Missed $1.10 EPS AND $3.06 Billion Missed $3.14 Billion Forecast in Revenue

Earnings

CSX Corp (NASDAQ: CSX) reported earnings of $1.08 per share on revenue of $3.06 billion for the second quarter of 2019. Analysts had expected the railroad operator to earn $1.10 per share on revenue of $3.14 billion. CSX’s Q2 revenue declined by 1% over the prior year as merchandise growth was offset by intermodal weakness.

CSX Corporation NASDAQ: CSX

Market Reaction > After hours $74.25 −5.30 (-6.66%)

Highlights

  • Merchandise volume and coal volume was up by 1% and 2%, respectively.
  • However intermodal volume decreased 10% primarily due to rationalization of low-density lanes.
  • Expenses decreased 3% year-over-year to $1.76 billion, driven by efficiency savings and lower volume.
  • Labor and Fringe expense decreased $21 million, while Materials, Supplies and Other expense dropped $14 million.
  • Fuel expense declined $36 million primarily due to a 6% price decrease, record fuel efficiency and lower volume.
  • During the second quarter of 2019, CSX repurchased 11 million shares for $860 million.

Outlook

CSX expects full-year 2019 revenue to decline 1-2%. This outlook reflects the company’s present activity levels, with upside if conditions improve in the second half. CSX added that it is taking a cautious forecasting approach given the economic uncertainty.

Source: CSX, Aphastreet

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