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CSX to Report Q1 Earnings: Will Cost Woes Hurt Results?

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CSX Corporation (CSX - Free Report) is scheduled to report first-quarter 2022 results on Apr 20, after market close.

The Zacks Consensus Estimate for the company’s first-quarter earnings has been revised downward by 10.5% in the past 90 days. However, the company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters while missing the same in one.

Let’s see how things are shaping up for this earnings season.

CSX Corporation Price and EPS Surprise

CSX Corporation Price and EPS Surprise

CSX Corporation price-eps-surprise | CSX Corporation Quote

Factors to Note

Supply chain disruptions, including labor and equipment shortages, are expected to have hurt CSX’s first-quarter performance.

The merchandise segment’s performance is likely to have been affected by low volumes due to automotive volume softness, resulting from semiconductor shortages. The Zacks Consensus Estimate for merchandise volumes indicates a 4.5% dip from the sequential quarter’s reported number.

Additionally, CSX’s bottom line is likely to reflect high costs due to increased labor and fringe expenses, purchased services and other, and fuel expenses.

However, the Quality Carriers acquisition in July 2021 is expected to have boosted the company’s top line in the first quarter.

Earnings Whispers

The proven Zacks model does not conclusively predict an earnings beat for CSX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: CSX has an Earnings ESP of -3.52%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CSX carries a Zacks Rank #3.

Highlights of Q4 Earnings

CSX’s fourth-quarter 2021 earnings of 42 cents per share surpassed the Zacks Consensus Estimate by a penny. The bottom line improved in double digits year over year owing to higher revenues. Total revenues of $3,427 million outperformed the Zacks Consensus Estimate of $3296 million. The top line jumped 21.3% year over year, owing to growth across all its businesses, besides revenues from Quality Carriers.

Stocks to Consider

Investors interested in the broader Transportation sector may consider Landstar System (LSTR - Free Report) and Knight-Swift Transportation Holdings (KNX - Free Report) . These companies possess the right combination of elements to beat on earnings in this reporting cycle.

Landstar System has an Earnings ESP of +9.22% and is a Zacks #3 Ranked stock at present. LSTR will release first-quarter 2022 results on Apr 20.

Landstar’s first-quarter results are expected to reflect gains from an improved freight scenario in the United States. Higher truck rates, owing to tight truck capacity, are anticipated to have aided the March-quarter performance.

Knight-Swift has an Earnings ESP of +4.17% and is currently a #3 Ranked player. KNX will release first-quarter 2022 results on Apr 20.

Knight-Swift’s first-quarter results are expected to be aided by an improved freight scenario in the United States. Revenues at the Logistics segment are likely to have been strong due to an increase in load count and revenue per load.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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