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CSX Corporation (CSX - Free Report) reported second-quarter 2016 earnings of 47 cents per share, which beat the Zacks Consensus Estimate of 44 cents.
Revenues of $2.7 billion were in line with the Zacks Consensus Estimate but declined 12% year over year due to a 9% overall decline in volume resulting from more than 30% coal volume decline. Second-quarter operating income also fell 17% year over year to $840 million. Meanwhile, operating ratio (defined as operating expenses as a percentage of revenues) worsened 210 basis points to 68.9%. Operating expenses contracted 9% year over year to $1.86 billion.
Merchandise revenues fell 5% year over year to $1,772 million in the quarter owing to a 5% volume contraction. This was largely a result of a revenue decline of 10% and 9% in Chemicals and Agricultural Products segments respectively.
Coal revenues deteriorated 34% year over year to $416 million on a 34% reduction in volumes which was a result of soft global coal demand and declining fuel prices.
Intermodal revenues dropped 7% year over year to $419 million. On a year-over-year basis, volumes increased 4% while revenue per user declined 3%.
Other revenues grossed $97 million, down 23% year over year.
Liquidity
The company exited the second quarter of 2016 with cash and cash equivalents of $566 million compared with $628 million at the end of 2015. Long-term debts totaled $9,905 million compared with $10,515 million at the end of 2015. For the six months ending Jun 30, 2016, net cash from operating activities stood at $1,592 million versus $1,582 million in the same period last year.
Notably, the company declared dividends of 18 cents per share payable on Sep 15, 2016, to shareholders of record as of Aug 31, 2016.
CSX reiterated its outlook of a decline in earnings per share in fiscal 2016 due to transition in energy markets, strong U.S. dollar and low commodity prices. It expects to achieve operating ratio in mid-60s range over the long term.
Zacks Rank and Stocks to Consider
CSX currently carries a Zacks Rank #3 (Hold). Investors interested in the broader transportation sector could consider stocks like United Parcel Services, Inc. (UPS - Free Report) , Star Bulk Carriers Corporation (SBLK - Free Report) and Euroseas Limited (ESEA - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
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CSX Corp (CSX) Q2 Earnings Beat Estimates, Decline Y/Y
CSX Corporation (CSX - Free Report) reported second-quarter 2016 earnings of 47 cents per share, which beat the Zacks Consensus Estimate of 44 cents.
Revenues of $2.7 billion were in line with the Zacks Consensus Estimate but declined 12% year over year due to a 9% overall decline in volume resulting from more than 30% coal volume decline. Second-quarter operating income also fell 17% year over year to $840 million. Meanwhile, operating ratio (defined as operating expenses as a percentage of revenues) worsened 210 basis points to 68.9%. Operating expenses contracted 9% year over year to $1.86 billion.
Segmental Performance
Merchandise revenues fell 5% year over year to $1,772 million in the quarter owing to a 5% volume contraction. This was largely a result of a revenue decline of 10% and 9% in Chemicals and Agricultural Products segments respectively.
Coal revenues deteriorated 34% year over year to $416 million on a 34% reduction in volumes which was a result of soft global coal demand and declining fuel prices.
Intermodal revenues dropped 7% year over year to $419 million. On a year-over-year basis, volumes increased 4% while revenue per user declined 3%.
Other revenues grossed $97 million, down 23% year over year.
Liquidity
The company exited the second quarter of 2016 with cash and cash equivalents of $566 million compared with $628 million at the end of 2015. Long-term debts totaled $9,905 million compared with $10,515 million at the end of 2015. For the six months ending Jun 30, 2016, net cash from operating activities stood at $1,592 million versus $1,582 million in the same period last year.
Notably, the company declared dividends of 18 cents per share payable on Sep 15, 2016, to shareholders of record as of Aug 31, 2016.
CSX CORP Price, Consensus and EPS Surprise
CSX CORP Price, Consensus and EPS Surprise | CSX CORP Quote
Guidance
CSX reiterated its outlook of a decline in earnings per share in fiscal 2016 due to transition in energy markets, strong U.S. dollar and low commodity prices. It expects to achieve operating ratio in mid-60s range over the long term.
Zacks Rank and Stocks to Consider
CSX currently carries a Zacks Rank #3 (Hold). Investors interested in the broader transportation sector could consider stocks like United Parcel Services, Inc. (UPS - Free Report) , Star Bulk Carriers Corporation (SBLK - Free Report) and Euroseas Limited (ESEA - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>