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Why Is CSX Corp. (CSX) Up 28.4% Since the Last Earnings Report?
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A month has gone by since the last earnings report for CSX Corporation (CSX - Free Report) . Shares have added about 28.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fourth Quarter Earnings
CSX Corporation reported fourth-quarter 2016 earnings of $0.49 per share, in line with the Zacks Consensus Estimate. Revenues of $3.04 billion outpaced the Zacks Consensus Estimate of $2.86 billion and improved 9% year over year owing to a 5% increase in overall volumes. The company saw growth in volumes across most key segments.
Fourth-quarter operating income improved 27% year over year to $1 billion. Moreover, operating ratio (operating expenses as a percentage of revenues) contracted 460 basis points to 67%. Operating expenses increased 2% year over year to $2.03 billion.
Segmental Performance
Merchandise revenues grew 6% year over year to $1,895 million in the quarter owing to 4% rise in volumes. This was largely due to increase of 15% and 8% in revenues in the Automotive and Agricultural and Food Products segments, respectively.
Coal revenues surged 23% year over year to $551 million due to an 8% improvement in volumes.
Intermodal revenues climbed 7% year over year to $477 million. On a year-over-year basis, volumes increased 4%.
Other revenues grossed $114 million, up 13% year over year.
Liquidity
The company exited the fourth quarter with cash and cash equivalents of $603 million compared with $628 million at the end of 2015. Long-term debt totaled $10,962 million as against $10,515 million at the end of 2015. For the period ending Dec 30, 2016, net cash from operating activities was $3,041 million compared with $3,370 million in the year-ago period.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been three upward revisions for the current quarter.
At this time, CSX Corporation's stock has a subpar Growth Score of 'D', however its Momentum is doing a lot better with a 'B'. Charting a somewhat similar path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
While estimates have been trending upward for the stock, the magnitude of these revisions looks promising. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Why Is CSX Corp. (CSX) Up 28.4% Since the Last Earnings Report?
A month has gone by since the last earnings report for CSX Corporation (CSX - Free Report) . Shares have added about 28.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fourth Quarter Earnings
CSX Corporation reported fourth-quarter 2016 earnings of $0.49 per share, in line with the Zacks Consensus Estimate. Revenues of $3.04 billion outpaced the Zacks Consensus Estimate of $2.86 billion and improved 9% year over year owing to a 5% increase in overall volumes. The company saw growth in volumes across most key segments.
Fourth-quarter operating income improved 27% year over year to $1 billion. Moreover, operating ratio (operating expenses as a percentage of revenues) contracted 460 basis points to 67%. Operating expenses increased 2% year over year to $2.03 billion.
Segmental Performance
Merchandise revenues grew 6% year over year to $1,895 million in the quarter owing to 4% rise in volumes. This was largely due to increase of 15% and 8% in revenues in the Automotive and Agricultural and Food Products segments, respectively.
Coal revenues surged 23% year over year to $551 million due to an 8% improvement in volumes.
Intermodal revenues climbed 7% year over year to $477 million. On a year-over-year basis, volumes increased 4%.
Other revenues grossed $114 million, up 13% year over year.
Liquidity
The company exited the fourth quarter with cash and cash equivalents of $603 million compared with $628 million at the end of 2015. Long-term debt totaled $10,962 million as against $10,515 million at the end of 2015. For the period ending Dec 30, 2016, net cash from operating activities was $3,041 million compared with $3,370 million in the year-ago period.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been three upward revisions for the current quarter.
CSX Corporation Price and Consensus
CSX Corporation Price and Consensus | CSX Corporation Quote
VGM Scores
At this time, CSX Corporation's stock has a subpar Growth Score of 'D', however its Momentum is doing a lot better with a 'B'. Charting a somewhat similar path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
While estimates have been trending upward for the stock, the magnitude of these revisions looks promising. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.