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What's in Store for CSX Q3 Earnings Amid Coronavirus Woes?
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CSX Corporation (CSX - Free Report) is scheduled to report third-quarter 2020 results on Oct 21, after market close.
The Zacks Consensus Estimate for third-quarter earnings has been revised 2.2% upward to 92 cents per share in the past 60 days. Moreover, it has an impressive earnings history, having outperformed estimates in three of the preceding four quarters (missing the same in one). It has a trailing four-quarter positive earnings surprise of 3.7%, on average.
Against this backdrop, let’s discuss the factors that might have impacted CSX’s September-quarter performance.
We expect CSX’s overall volumes for the to-be-reported quarter to have increased sequentially owing to gradual recovery from coronavirus woes. The Zacks Consensus Estimate for total volumes suggests a 19.4% gain sequentially.
Intermodal volumes are also likely to have aided third-quarter performance owing to reopening of operations after the second quarter. The Zacks Consensus Estimate for intermodal volumes indicates a 22% increase from the June-end reported figure. Notably, Zacks Consensus Estimate for intermodal revenue also inched up 25.9% sequentially.
Coal volumes are expected to have been aided in the third quarter by the gradual increase in export and domestic coal demand. Further, increased coal volumes are likely to have aided coal revenues in the to-be-reported quarter. The consensus mark for coal revenues suggests 10.8% rise from the number reported in second-quarter 2020.
Improved operational efficiency, courtesy of the precision scheduled railroading model, is expected to have contributed to the company’s bottom line in the quarter to be reported. The railroad operator’s operating ratio (operating expenses as a percentage of revenues) is likely to have improved in the quarter to be reported owing to cost-controlling initiatives. Notably, lower the value of this metric, the better.
Despite coronavirus concerns, CSX does not intend to cut back much on capital expenses. This might have hurt its bottom-line performance.
Earnings Whispers
The proven Zacks model predicts an earnings beat for CSX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: CSX has an Earnings ESP of 0.62% as the Most Accurate Estimate is pegged at 93 cents, higher than the Zacks Consensus Estimate of 92 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CSX carries a Zacks Rank #3.
Highlights of Q2 Earnings
CSX’s earnings of 65 cents per share missed the Zacks Consensus Estimate of 67 cents. Moreover, the bottom line plunged 39.8% year over year due to drop in revenues. Total revenues of $2,255 million also lagged the Zacks Consensus Estimate of $2,306 million and declined 26.3% year over year owing to coronavirus-led volume declines.
Other Stocks to Consider
Investors interested in the broader Transportation sector may consider Union Pacific Corporation (UNP - Free Report) , Kansas City Southern and Norfolk Southern Corporation (NSC - Free Report) as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Union Pacific has an Earnings ESP of +0.53% and is Zacks #3 Ranked, presently. The company will release third-quarter 2020 results on Oct 22.
Kansas City Southern has an Earnings ESP of +0.50% and a Zacks Rank of 3 at present. The company will release third-quarter 2020 results on Oct 16.
Norfolk Southern has an Earnings ESP of +0.52% and is currently a Zacks #3 Ranked player. The company will release third-quarter 2020 results on Oct 28.
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The 2020 Election Stock Report reveals specific stocks you’ll want to own immediately after the results are announced – 6 if Trump wins, 6 if Biden wins. Past election reports have led investors to gains of +71%, +83%, even +185% in the following months. This year’s picks could be even more lucrative.
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What's in Store for CSX Q3 Earnings Amid Coronavirus Woes?
CSX Corporation (CSX - Free Report) is scheduled to report third-quarter 2020 results on Oct 21, after market close.
The Zacks Consensus Estimate for third-quarter earnings has been revised 2.2% upward to 92 cents per share in the past 60 days. Moreover, it has an impressive earnings history, having outperformed estimates in three of the preceding four quarters (missing the same in one). It has a trailing four-quarter positive earnings surprise of 3.7%, on average.
Against this backdrop, let’s discuss the factors that might have impacted CSX’s September-quarter performance.
CSX Corporation Price and EPS Surprise
CSX Corporation price-eps-surprise | CSX Corporation Quote
Factors Likely at Play
We expect CSX’s overall volumes for the to-be-reported quarter to have increased sequentially owing to gradual recovery from coronavirus woes. The Zacks Consensus Estimate for total volumes suggests a 19.4% gain sequentially.
Intermodal volumes are also likely to have aided third-quarter performance owing to reopening of operations after the second quarter. The Zacks Consensus Estimate for intermodal volumes indicates a 22% increase from the June-end reported figure. Notably, Zacks Consensus Estimate for intermodal revenue also inched up 25.9% sequentially.
Coal volumes are expected to have been aided in the third quarter by the gradual increase in export and domestic coal demand. Further, increased coal volumes are likely to have aided coal revenues in the to-be-reported quarter. The consensus mark for coal revenues suggests 10.8% rise from the number reported in second-quarter 2020.
Improved operational efficiency, courtesy of the precision scheduled railroading model, is expected to have contributed to the company’s bottom line in the quarter to be reported. The railroad operator’s operating ratio (operating expenses as a percentage of revenues) is likely to have improved in the quarter to be reported owing to cost-controlling initiatives. Notably, lower the value of this metric, the better.
Despite coronavirus concerns, CSX does not intend to cut back much on capital expenses. This might have hurt its bottom-line performance.
Earnings Whispers
The proven Zacks model predicts an earnings beat for CSX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: CSX has an Earnings ESP of 0.62% as the Most Accurate Estimate is pegged at 93 cents, higher than the Zacks Consensus Estimate of 92 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CSX carries a Zacks Rank #3.
Highlights of Q2 Earnings
CSX’s earnings of 65 cents per share missed the Zacks Consensus Estimate of 67 cents. Moreover, the bottom line plunged 39.8% year over year due to drop in revenues. Total revenues of $2,255 million also lagged the Zacks Consensus Estimate of $2,306 million and declined 26.3% year over year owing to coronavirus-led volume declines.
Other Stocks to Consider
Investors interested in the broader Transportation sector may consider Union Pacific Corporation (UNP - Free Report) , Kansas City Southern and Norfolk Southern Corporation (NSC - Free Report) as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Union Pacific has an Earnings ESP of +0.53% and is Zacks #3 Ranked, presently. The company will release third-quarter 2020 results on Oct 22.
Kansas City Southern has an Earnings ESP of +0.50% and a Zacks Rank of 3 at present. The company will release third-quarter 2020 results on Oct 16.
Norfolk Southern has an Earnings ESP of +0.52% and is currently a Zacks #3 Ranked player. The company will release third-quarter 2020 results on Oct 28.
Have You Seen Zacks’ 2020 Election Stock Report?
The upcoming election could be a massive buying opportunity for savvy investors. Trillions of dollars will shift into new market sectors after the election. The question is, which sectors will soar for each candidate? Zacks has put together a new special report to help readers like you target big profits.
The 2020 Election Stock Report reveals specific stocks you’ll want to own immediately after the results are announced – 6 if Trump wins, 6 if Biden wins. Past election reports have led investors to gains of +71%, +83%, even +185% in the following months. This year’s picks could be even more lucrative.
Check out Zacks’ 2020 Election Stock Report >>