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CSX Earnings Surpass Estimates in Q4, Revenues Disappoint
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CSX Corporation (CSX - Free Report) reported fourth-quarter 2017 earnings (excluding $3.98 from non-recurring items) of 64 cents per share, beating the Zacks Consensus Estimate of 56 cents. The figure excludes the $3.6 billion net tax reform benefit from the Tax Cuts and Jobs Act of 2017 and a net restructuring charge of $10 million. Moreover, the bottom line climbed 30.6% year over year due to lower costs.
However, revenues of $2,863 million missed the Zacks Consensus Estimate of $2,882.2 million. Also, the top line declined 5.7% year over year to the tune of $178 million, mainly due to the impact of an extra fiscal week in 2016, resulting from CSX’s 52/53 fiscal reporting calendar in 2016. Overall, volumes contracted 2% year over year.
The revenue miss disappointed investors. Consequently, the stock slid 1% in after-hours trading on Jan 16.
Fourth-quarter operating income (on a reported basis) improved 12% year over year to $1,121 million. As the operating ratio (operating expenses as a percentage of revenues) reportedly improved to 60.9% from 67% in the prior-year quarter, operating expenses declined 14% from the year-ago quarter.
Adjusted operating income in the fourth quarter was $1,008 million. On an adjusted basis, the operating ratio for the reported quarter was 64.8%.
Segmental Performance
Merchandise revenues slipped 2% year over year to $1,743 million in the quarter. Also, merchandise volumes declined 5% year over year.
Coal revenues rose 4% year over year to $541 million in the quarter. While, coal volumes were flat year over year.
Intermodal revenues also improved 4% year over year to $471 million. On a year-over-year basis, volumes inched up 1%.
Other revenues grossed $108 million, down 4% year over year.
This Zacks Rank #3 (Hold) company exited the fourth quarter with cash and cash equivalents of $401 million compared with $603 million at the end of 2016. Long-term debt totaled $11,790 million compared with $10,962 million at 2016-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For the period ending Dec 31, 2017, net cash provided by operating activities was $3,472 million compared with $3,041 million in the year-ago period.
Top and Bottom-line Performance in 2017
For 2017, the company reported adjusted earnings per share of $2.30, surpassing the Zacks Consensus Estimate of $2.21. Revenues climbed 3% to $11, 408 million, in line with the consensus mark.
Upcoming Releases
Investors interested in the railroad space are keenly awaiting fourth-quarter earnings reports of key players like Canadian National Railway Company (CNI - Free Report) , Kansas City Southern and Norfolk Southern Corporation (NSC - Free Report) . Kansas City Southern is scheduled to report fourth-quarter results on Jan 19 while Canadian National and Norfolk Southern will report on Jan 23 and Jan 24, respectively.
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CSX Earnings Surpass Estimates in Q4, Revenues Disappoint
CSX Corporation (CSX - Free Report) reported fourth-quarter 2017 earnings (excluding $3.98 from non-recurring items) of 64 cents per share, beating the Zacks Consensus Estimate of 56 cents. The figure excludes the $3.6 billion net tax reform benefit from the Tax Cuts and Jobs Act of 2017 and a net restructuring charge of $10 million. Moreover, the bottom line climbed 30.6% year over year due to lower costs.
However, revenues of $2,863 million missed the Zacks Consensus Estimate of $2,882.2 million. Also, the top line declined 5.7% year over year to the tune of $178 million, mainly due to the impact of an extra fiscal week in 2016, resulting from CSX’s 52/53 fiscal reporting calendar in 2016. Overall, volumes contracted 2% year over year.
The revenue miss disappointed investors. Consequently, the stock slid 1% in after-hours trading on Jan 16.
Fourth-quarter operating income (on a reported basis) improved 12% year over year to $1,121 million. As the operating ratio (operating expenses as a percentage of revenues) reportedly improved to 60.9% from 67% in the prior-year quarter, operating expenses declined 14% from the year-ago quarter.
Adjusted operating income in the fourth quarter was $1,008 million. On an adjusted basis, the operating ratio for the reported quarter was 64.8%.
Segmental Performance
Merchandise revenues slipped 2% year over year to $1,743 million in the quarter. Also, merchandise volumes declined 5% year over year.
Coal revenues rose 4% year over year to $541 million in the quarter. While, coal volumes were flat year over year.
Intermodal revenues also improved 4% year over year to $471 million. On a year-over-year basis, volumes inched up 1%.
Other revenues grossed $108 million, down 4% year over year.
CSX Corporation Price, Consensus and EPS Surprise
CSX Corporation Price, Consensus and EPS Surprise | CSX Corporation Quote
Liquidity
This Zacks Rank #3 (Hold) company exited the fourth quarter with cash and cash equivalents of $401 million compared with $603 million at the end of 2016. Long-term debt totaled $11,790 million compared with $10,962 million at 2016-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For the period ending Dec 31, 2017, net cash provided by operating activities was $3,472 million compared with $3,041 million in the year-ago period.
Top and Bottom-line Performance in 2017
For 2017, the company reported adjusted earnings per share of $2.30, surpassing the Zacks Consensus Estimate of $2.21. Revenues climbed 3% to $11, 408 million, in line with the consensus mark.
Upcoming Releases
Investors interested in the railroad space are keenly awaiting fourth-quarter earnings reports of key players like Canadian National Railway Company (CNI - Free Report) , Kansas City Southern and Norfolk Southern Corporation (NSC - Free Report) . Kansas City Southern is scheduled to report fourth-quarter results on Jan 19 while Canadian National and Norfolk Southern will report on Jan 23 and Jan 24, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>