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CSX (CSX) Up 0.5% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for CSX (CSX - Free Report) . Shares have added about 0.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CSX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at CSX in Q4
CSX’s fourth-quarter 2020 earnings (excluding 5 cents from non-recurring items) of $1.04 per share surpassed the Zacks Consensus Estimate of $1. The bottom line improved 5.1% year over year due to impressive performance of the intermodal segment.
Total revenues of $2,825 million outperformed the Zacks Consensus Estimate of $2,747.5 million. However, the top line dipped 2.1% year over year owing to lower fuel surcharge revenues and coal volume declines.
Fourth-quarter operating income increased 5% to $1,215 million. Operating ratio (operating expenses as a percentage of revenues) improved to 57% from 60% in the prior-year quarter, thanks to reduced operating expenses. Notably, lower the value of the metric, the better. Total expenses declined 7% year over year in the reported quarter. Costs reduced primarily due to increased efficiency.
Segmental Performance
Merchandise revenues were flat year over year at $1,864 million in the quarter under review. Merchandise volumes remained unaltered from the year-ago period.
Coal revenues plunged 18% year over year to $375 million in the reported quarter. Coal volumes contracted 9% due to lower domestic and export coal volumes.
Intermodal revenues climbed 6% year over year to $476 million. Volumes increased 11%, with both domestic and international shipments increasing as a result of tightening truck capacity among other factors.
Other revenues dropped 6% to $110 million in the reported quarter.
Liquidity & Share Buyback
This company exited the fourth quarter with cash and cash equivalents of $3,129 million compared with $958 million at the end of December 2019. Long-term debt totaled $16,304 million compared with $15,993 million at 2019-end. As of Dec 31, 2020, net cash provided by operating activities was $4,263 million, compared with $4,850 million in the year-earlier period.
As of Dec 31, 2020, CSX repurchased 13 million shares for $867 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, CSX has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CSX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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CSX (CSX) Up 0.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for CSX (CSX - Free Report) . Shares have added about 0.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CSX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at CSX in Q4
CSX’s fourth-quarter 2020 earnings (excluding 5 cents from non-recurring items) of $1.04 per share surpassed the Zacks Consensus Estimate of $1. The bottom line improved 5.1% year over year due to impressive performance of the intermodal segment.
Total revenues of $2,825 million outperformed the Zacks Consensus Estimate of $2,747.5 million. However, the top line dipped 2.1% year over year owing to lower fuel surcharge revenues and coal volume declines.
Fourth-quarter operating income increased 5% to $1,215 million. Operating ratio (operating expenses as a percentage of revenues) improved to 57% from 60% in the prior-year quarter, thanks to reduced operating expenses. Notably, lower the value of the metric, the better. Total expenses declined 7% year over year in the reported quarter. Costs reduced primarily due to increased efficiency.
Segmental Performance
Merchandise revenues were flat year over year at $1,864 million in the quarter under review. Merchandise volumes remained unaltered from the year-ago period.
Coal revenues plunged 18% year over year to $375 million in the reported quarter. Coal volumes contracted 9% due to lower domestic and export coal volumes.
Intermodal revenues climbed 6% year over year to $476 million. Volumes increased 11%, with both domestic and international shipments increasing as a result of tightening truck capacity among other factors.
Other revenues dropped 6% to $110 million in the reported quarter.
Liquidity & Share Buyback
This company exited the fourth quarter with cash and cash equivalents of $3,129 million compared with $958 million at the end of December 2019. Long-term debt totaled $16,304 million compared with $15,993 million at 2019-end. As of Dec 31, 2020, net cash provided by operating activities was $4,263 million, compared with $4,850 million in the year-earlier period.
As of Dec 31, 2020, CSX repurchased 13 million shares for $867 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, CSX has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CSX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.