Back to top

Image: Bigstock

CSX Q2 Earnings & Revenues Miss on Coronavirus-Led Weak Volumes

Read MoreHide Full Article

CSX Corporation (CSX - Free Report) reported lower-than-expected results in second-quarter 2020 due to reduced economic activity on account of coronavirus. Following the disappoinment, shares of the company dipped 1.4% in after-hour trading on Jul 22.

The company’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 a 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.

Second-quarter operating income fell 37% to $828 million. Operating ratio (operating expenses as a percentage of revenues) deteriorated to 63.3% from 57.4% in the prior-year quarter as a result of low revenues. Notably, lower the value of the metric, the better. Total expenses declined 19% year over year in the reported quarter. Costs reduced primarily due to increased efficiency.

CSX Corporation Price, Consensus and EPS Surprise

 

 

Segmental Performance

Merchandise revenues plummeted 22% year over year to $1,508 million in the quarter under review. Merchandise volumes also declined 22%.

Coal revenues plunged 48% year over year to $287 million in the reported quarter. Coal volumes contracted 44% due to lower domestic and export coal volumes.

Moreover, Intermodal revenues slid 18% year over year to $359 million. Volumes declined 11% with both domestic and international volumes dwindling due to coronavirus-led global economic impacts.

Other revenues too fell 19% to $101 million in the reported quarter.

Liquidity & Share Buyback

This Zacks Rank #4 (Sell) company exited the second quarter with cash and cash equivalents of $2,391 million compared with $958 million at the end of December 2019. Long-term debt totaled $16,128 million compared with $15,993 million at 2019-end. As of Jun 30, 2020, net cash provided by operating activities was $2,184 million, compared with $2,267 million in the year-earlier period.

As of Jun 30, 2020, CSX repurchased 10 million shares for $616 million.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported second-quarter earnings numbers.

Delta, carrying a Zacks Rank #4, incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share in the June quarter, wider than the Zacks Consensus Estimate of a loss of $3.97. Total revenues in the quarter came in at $1,468 million, surpassing the Zacks Consensus Estimate of $1,400.8 million.

J.B. Hunt, carrying a Zacks Rank #3 (Hold), reported second-quarter earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million also beat the Zacks Consensus Estimate of $2,060.9 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3  company’s total revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


CSX Corporation (CSX) - free report >>

Delta Air Lines, Inc. (DAL) - free report >>

J.B. Hunt Transport Services, Inc. (JBHT) - free report >>

Published in