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CSX Q2 Earnings In Line With Estimates, Revenues Fall Short
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CSX Corporation’s(CSX - Free Report) second-quarter 2023 earnings per share (EPS) of 49 cents matched the Zacks Consensus Estimate. However, the bottom line declined year over year.
Total revenues of $3,699 million lagged the Zacks Consensus Estimate of $3,730.6 million. The top line decreased 3% year over year due to lower fuel prices, reduced supplemental revenues, a decline in export coal benchmark prices and a decrease in intermodal volumes. These factors offset the effects of volume growth in coal and merchandise and solid gains in merchandise pricing.
Second-quarter operating income fell 13% to $1,482 million. The operating ratio (operating expenses as a percentage of revenues) rose to 59.9% from 55.4% in the prior-year quarter, with total expenses decreasing 5% year over year.
Merchandise revenues climbed 5% year over year to $2,196 million in the reported quarter, higher than our estimate of $2,044 million.Merchandise volumes grew 3% to $677 million. Segmental revenue per unit increased 1%.
Intermodal revenues fell 18% year over year to $492 million, higher than our estimate of $457.7 million.Volumes fell 10% year over year. Segmental revenue per unit decreased 9%.
Coal revenues fell 2% year over year to $637 million in the reported quarter, lower than our expectation of $768.6 million.Coal volumes increased 4%. Segmental revenue per unit fell 6%.
Effective from third-quarter 2021, CSX introduced a segment called Trucking comprising the operations of Quality Carriers, acquired by CSX last year. Revenues from the segment totaled $227 million, down 12% year over year due to lower fuel and capacity surcharges.
Other revenues fell 27% to $147 million in the reported quarter, slightly lower than our estimate of $148 million.The downside was owing to lower intermodal storage and equipment usage.
Liquidity, Dividends and Buyback
CSX exited the second quarter with cash and cash equivalents of $956 million compared with $1,291 million at the end of the prior quarter. Long-term debt totaled $17,898 million compared with $17,911 million at the prior-quarter end.
CSX generated $1,232 million of cash from operating activities in the second quarter.
As of Jun 30, 2023, CSX rewarded its shareholders through buybacks and dividends worth $863 million and $222 million, respectively.
Outlook
CSX continues to expect capex for 2023 to be around $2.3 billion. To combat inflationary pressures, management aims to focus on increasing efficiencies. Volumes are expected to be aided by strength in the merchandise and coal units.
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.
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CSX Q2 Earnings In Line With Estimates, Revenues Fall Short
CSX Corporation’s(CSX - Free Report) second-quarter 2023 earnings per share (EPS) of 49 cents matched the Zacks Consensus Estimate. However, the bottom line declined year over year.
Total revenues of $3,699 million lagged the Zacks Consensus Estimate of $3,730.6 million. The top line decreased 3% year over year due to lower fuel prices, reduced supplemental revenues, a decline in export coal benchmark prices and a decrease in intermodal volumes. These factors offset the effects of volume growth in coal and merchandise and solid gains in merchandise pricing.
Second-quarter operating income fell 13% to $1,482 million. The operating ratio (operating expenses as a percentage of revenues) rose to 59.9% from 55.4% in the prior-year quarter, with total expenses decreasing 5% year over year.
CSX Corporation Price, Consensus and EPS Surprise
CSX Corporation price-consensus-eps-surprise-chart | CSX Corporation Quote
Segmental Performances
Merchandise revenues climbed 5% year over year to $2,196 million in the reported quarter, higher than our estimate of $2,044 million.Merchandise volumes grew 3% to $677 million. Segmental revenue per unit increased 1%.
Intermodal revenues fell 18% year over year to $492 million, higher than our estimate of $457.7 million.Volumes fell 10% year over year. Segmental revenue per unit decreased 9%.
Coal revenues fell 2% year over year to $637 million in the reported quarter, lower than our expectation of $768.6 million.Coal volumes increased 4%. Segmental revenue per unit fell 6%.
Effective from third-quarter 2021, CSX introduced a segment called Trucking comprising the operations of Quality Carriers, acquired by CSX last year. Revenues from the segment totaled $227 million, down 12% year over year due to lower fuel and capacity surcharges.
Other revenues fell 27% to $147 million in the reported quarter, slightly lower than our estimate of $148 million.The downside was owing to lower intermodal storage and equipment usage.
Liquidity, Dividends and Buyback
CSX exited the second quarter with cash and cash equivalents of $956 million compared with $1,291 million at the end of the prior quarter. Long-term debt totaled $17,898 million compared with $17,911 million at the prior-quarter end.
CSX generated $1,232 million of cash from operating activities in the second quarter.
As of Jun 30, 2023, CSX rewarded its shareholders through buybacks and dividends worth $863 million and $222 million, respectively.
Outlook
CSX continues to expect capex for 2023 to be around $2.3 billion. To combat inflationary pressures, management aims to focus on increasing efficiencies. Volumes are expected to be aided by strength in the merchandise and coal units.
Currently, CSX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.