CSX Shares Rise On Q3 Earnings Beat, Revenues Miss Mark

CSX Corporation (NASDAQ:CSX) reported third-quarter 2019 earnings of $1.08 per share, beating the Zacks Consensus Estimate of $1.01. The bottom line also inched up 2.9% year over year on lower costs. Following this earnings outperformance, shares of the company rose more than 4% in after-hours trading on Oct 16.

Meanwhile, total revenues of $2,978 million lagged the Zacks Consensus Estimate of $2,980.6 million and also decreased 4.8% year over year. The top line was affected by disappointing performance at the coal and intermodal segments.

Third-quarter operating income was flat year over year at $1,287 million. Operating ratio (operating expenses as a percentage of revenues) improved to 56.8% from 58.7% in the prior-year quarter with total expenses decreasing 8% from the year-ago period. Costs reduced primarily due to increased efficiency and low fuel prices.

Segmental Performance

Merchandise revenues climbed 1% year over year to $1,906 million in the quarter under review. Merchandise volumes were flat year over year.

Coal revenues declined 12% year over year to $516 million in the reported quarter. Coal volumes also contracted 9% year over year due to lower domestic and export coal volumes.

Moreover, Intermodal revenues dropped 11% year over year to $447 million. Volumes also shrank 9% on a year-over-year basis with both domestic and international volumes slipping.

Other revenues too fell 28% to $109 million in the reported quarter.

Liquidity & Share Buyback

This Zacks Rank #3 (Hold) company exited the third quarter with cash and cash equivalents of $1,521 million compared with $858 million at the end of last December. Long-term debt totaled $15,992 million compared with $14,739 million at 2018 end. As of Sep 30, 2019, net cash provided by operating activities was $3,737 million compared with $3,406 million in the year-earlier period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

During the first nine months of 2019, the company repurchased 39 million shares at an average price of $71.11.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting third-quarter 2019 earnings reports from key players like Norfolk Southern Corporation (NYSE:NSC) , United Parcel Service (NYSE:UPS) and Southwest Airlines Co. (NYSE:LUV) . While UPS and Norfolk Southern will report earnings numbers on Oct 22 and Oct 23, respectively, Southwest will announce financial results on Oct 24.

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