Back to top

Image: Bigstock

Why Is CSX (CSX) Down 4.2% Since Last Earnings Report?

Read MoreHide Full Article

It has been about a month since the last earnings report for CSX (CSX - Free Report) . Shares have lost about 4.2% in that time frame, underperforming 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 drivers.

Earnings Miss at CSX in Q1

CSX’s first-quarter 2021 earnings of 93 cents per share missed the Zacks Consensus Estimate of 95 cents. Moreover, the bottom line declined 7% year over year due to operational disruption as a result of extreme winter weather conditions and lingering effects of the coronavirus pandemic on crew availability.

Total revenues of $2,813 million surpassed the Zacks Consensus Estimate of $2,810.4 million but dipped 1.5% year over year owing to lower merchandise, coal, and fuel surcharge revenues.

First-quarter operating income decreased 7% to $1,101 million. Operating ratio (operating expenses as a percentage of revenues) deteriorated to 60.9% from 58.7% in the prior-year quarter, with operating expenses increasing 2% year over year due to rise in labor and fringe costs, as well as materials, supplies and other costs. With respect to operating ratio, lower the value, the better.

Segmental Performance

Merchandise revenues declined 6% year over year to $1,818 million in the quarter under review. Merchandise volumes also decreased 6% from the year-ago period.

Coal revenues slipped 5% year over year to $384 million in the reported quarter. Coal volumes contracted 5% due to 13% decline in export coal volumes.

Intermodal revenues climbed 11% year over year to $468 million. Volumes increased 10%, with both domestic and international shipments increasing as a result of tightening truck capacity among other factors.

Other revenues jumped 42% to $143 million in the reported quarter.

Liquidity & Share Buyback

The company exited the first quarter with cash and cash equivalents of $2,955 million compared with $3,129 million at the end of December 2020. Long-term debt totaled $16,306 million compared with $16,304 million at 2020-end. As of Mar 31, 2021, net cash provided by operating activities was $1,232 million compared with $1,178 million in the year-earlier period.

As of Mar 31, 2021, CSX repurchased 6 million shares for $551 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

At this time, CSX has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 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.


See More Zacks Research for These Tickers


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


CSX Corporation (CSX) - free report >>

Published in