CSX Corporation (CSX) Earnings & Analysis

Latest quarter

CSX reported third-quarter revenue of $4.0 billion, up from $3.6 billion a year earlier and 1.66% above the consensus. Adjusted earnings per share of $0.57 also exceeded the consensus estimate of $0.52.

The company attributed its revenue increase to higher fuel surcharges, volume and pricing across merchandise, intermodal and coal. In its filing, CSX said domestic intermodal shipments grew through customer wins, new services and a tighter trucking market, while international shipments decreased slightly. It also reported higher export coal shipments but lower domestic coal shipments.

CSX’s operating margin rose to 39.1% from 30.3% a year earlier. The filing said expenses fell by $53 million, including the effects of a prior-year goodwill impairment and higher fuel costs in the latest quarter. Diluted earnings per share rose to $0.57 from $0.37, and free cash flow increased to $1.0 billion from $622.0 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Chief Commercial Officer Maryclare Kenney said domestic intermodal freight had driven growth, while international traffic was relatively flat in the recent quarter. In response to questions about demand, she said tighter truck capacity had prompted existing customers to consider shifting more freight to intermodal rail. CSX is also working with channel partners and directly with shippers to identify loads that could move by rail, she said.

On pricing, Kenney said CSX was discussing inflation with customers as contracts came up for renewal, although not every contract can be repriced each year. She expects same-store sales pricing this year to be stronger than last year and said discretionary merchandise pricing had accelerated during the year. Asked for a precise number on fuel-related pricing, Kenney declined to provide one.

CFO Kevin Boone said CSX handled 5% more volume in the quarter while reducing nonfuel costs by 3%. He said purchased services and other expenses fell 10%, with savings from better locomotive and vehicle use, less external labor and maintenance efficiencies. Boone said higher revenue and lower nonfuel costs increased operating income after adjusting for the prior-year goodwill impairment, despite fuel-price pressure on margins.

CEO Stephen Angel said service measures improved sequentially, although intermodal trip-plan compliance declined. In response to a question about capacity, he said CSX was coordinating operating and commercial teams to position crews and locomotives for expected demand. Angel said Atlanta volume had risen 50% over the last 3 years and CSX was investing in track to increase switching and processing capacity by 50%.

For the fourth quarter, Boone expects seasonal increases in labor and purchased services expenses, as well as a weather-related reduction in fuel efficiency. He cautioned that fuel volatility could affect margins and said CSX was incorporating efficiency initiatives into its 2027 budgets.

Guidance

CEO Stephen Angel said CSX now expects full-year 2026 revenue growth in the high single digits, compared with its previous mid-to-high single-digit range. He said the rest of the company’s guidance was unchanged.