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CSX Beats Earnings Expectations

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Railroad operator CSX Corporation (CSX - Free Report) , reported earnings after the bell, posting an EPS of $0.52 and revenues of $3.1 billion.  This was above the Zacks Consensus Estimate of $0.47, and revenue estimate of 3.0 billion.  The revenues beat reversed the previous four quarter decline in quarterly revenues.  Furthermore, this is the third consecutive positive earnings surprise (average surprise 9.01%), that CSX has posted in the past four quarters (CSX met expectations in Q3 2012). 

On a positive note, the recent recovery by the Construction and Industrial sectors has analysts suggesting that the increased need to ship raw materials and drilling equipment will act as a catalyst for future growth.  Simultaneously, CSX has increased spending on terminal capacity, and is currently expanding their existing network of rail lines (specifically, the Quebec Intermodal terminal which is scheduled to be operational in 2015); which will enhance their ability to post strong growth levels over the long term.  Moreover, CFO Fredrick Eliasson continues to estimate growth to be between 10%-15% thru 2015.

On the negative side, the subdued outlook of the Coal and Agriculture sectors are still weighing negatively on CSX as a whole, and may negate the positives of the Construction, and Industrial sectors.   Also, CSX announced that 2013 EPS will remain flat for the remainder of the year. 

In afterhours trading, CSX has rose $0.69, or 2.8% on mild volume, suggesting that the street views this announcement in a positive manner.  Zacks will post a detailed report on CSX’s earnings tomorrow morning.  Union Pacific Corporation (UNP - Free Report) and Kansas City Southern (KSU - Free Report) report earnings on July 18, and July 19 respectfully. 

Finally, CSX’s Board of Directors approved a $0.15 dividend payable on September 13 of this year (for shareholders of record on August 30).

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