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Why Is CSX (CSX) Down 0.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for CSX (CSX - Free Report) . Shares have lost about 0.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CSX due for a breakout? 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.
Earnings Beat at CSX in Q3
The company’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 94 cents. Moreover, the bottom line surged more than 100% year over year driven by lower costs and other tailwinds.
Further, revenues of $3,129 million surpassed the Zacks Consensus Estimate of $3,039.2 million and increased 14% year over year. Results were driven by a 4% rise in volumes, higher fuel recoveries and strong core pricing gains across all major markets.
Third-quarter operating income improved 49% year over year to $1,293 million. As the operating ratio (operating expenses as a percentage of revenues) improved to 58.7% from 68.4% in the prior-year quarter, total expenses decreased 2% from the year-ago period. Increase in efficiencies due to implementation of the precision scheduled railroading system contributed to the decline in expenses.
Buoyed by the impressive results, the company raised full-year 2018 guidance for revenues. Revenues are projected to increase between 6% and 8% (previous guidance had predicted an increase in the mid-single digits).
Segmental Performance
Merchandise revenues climbed 12% year over year to $1,890 million in the quarter under review. Moreover, merchandise volumes increased 5% year over year.
Coal revenues expanded 14% year over year to $588 million in the reported quarter. Coal volumes also grew 7% year over year.
Intermodal revenues rose 12% year over year to $500 million. On a year-over-year basis, volumes inched up 3%.
Other revenues grossed $151 million, up 59% year over year.
Liquidity
CSX exited the third quarter with cash and cash equivalents of $663 million compared with $401 million at the end of 2017. Long-term debt totaled $13,754 million compared with $11,790 million at 2017-end.
In the first nine months of the year, net cash provided by operating activities was $3,406 million compared with $2,861 million in the year-ago period.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 6.38% due to these changes.
VGM Scores
Currently, CSX has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise CSX has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is CSX (CSX) Down 0.3% Since Last Earnings Report?
It has been about a month since the last earnings report for CSX (CSX - Free Report) . Shares have lost about 0.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CSX due for a breakout? 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.
Earnings Beat at CSX in Q3
The company’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 94 cents. Moreover, the bottom line surged more than 100% year over year driven by lower costs and other tailwinds.
Further, revenues of $3,129 million surpassed the Zacks Consensus Estimate of $3,039.2 million and increased 14% year over year. Results were driven by a 4% rise in volumes, higher fuel recoveries and strong core pricing gains across all major markets.
Third-quarter operating income improved 49% year over year to $1,293 million. As the operating ratio (operating expenses as a percentage of revenues) improved to 58.7% from 68.4% in the prior-year quarter, total expenses decreased 2% from the year-ago period. Increase in efficiencies due to implementation of the precision scheduled railroading system contributed to the decline in expenses.
Buoyed by the impressive results, the company raised full-year 2018 guidance for revenues. Revenues are projected to increase between 6% and 8% (previous guidance had predicted an increase in the mid-single digits).
Segmental Performance
Merchandise revenues climbed 12% year over year to $1,890 million in the quarter under review. Moreover, merchandise volumes increased 5% year over year.
Coal revenues expanded 14% year over year to $588 million in the reported quarter. Coal volumes also grew 7% year over year.
Intermodal revenues rose 12% year over year to $500 million. On a year-over-year basis, volumes inched up 3%.
Other revenues grossed $151 million, up 59% year over year.
Liquidity
CSX exited the third quarter with cash and cash equivalents of $663 million compared with $401 million at the end of 2017. Long-term debt totaled $13,754 million compared with $11,790 million at 2017-end.
In the first nine months of the year, net cash provided by operating activities was $3,406 million compared with $2,861 million in the year-ago period.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 6.38% due to these changes.
VGM Scores
Currently, CSX has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise CSX has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.