Back to top

What's in Store for CSX Corporation (CSX) in Q2 Earnings?

Read MoreHide Full Article

CSX Corporation (CSX - Free Report) is slated to report second-quarter 2017 results on Jul 18, after the market closes.

Last quarter, the company had delivered a positive earnings surprise of 18.60%. It also has an impressive earnings history. The company has surpassed the Zacks Consensus Estimate in three of the last four quarters with an average beat of 8.02%.

Let’s see how things shape up this earnings season.

Factors at Play

Of late, CSX Corp. has been facing challenges from a strong U.S. dollar which might hurt results in the second quarter. The company’s top line might be affected by low commodity prices and dwindling volumes.

The fact that CSX Corp. is a highly leveraged company further adds to its woes and may hurt its second-quarter earnings.

However, the company’s cost control measures are impressive. The company witnessed growth in volumes across most key segments in the first quarter. In this regard, we expect CSX Corp. to perform well in the second quarter as well.

The company also projected an increase (albeit modest) in volumes in the second quarter at the 2017 Bank of America Merrill Lynch Conference. It said that second-quarter coal volumes have inched up 1% on a year-over-year basis (period considered Apr 1-May 12).

CSX Corp.’s move to hike its quarterly dividend payout as well as approving of a new buyback plan also raises optimism. In Apr 2017, the company had announced an 11% hike in its quarterly dividend payout. Following the completion of the previous buyback plan, the company’s board has cleared a new $1 billion share buyback program. 

Earnings Whispers

Our proven model does not conclusively show that CSX Corp. is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen.

Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Earnings ESP for CSX Corp. is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 59 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CSX Corp. carries a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s 0.00% ESP complicates our surprise prediction.

Please note that Sell-rated stocks (Zacks Rank #4 or 5) should never be considered for going into an earnings announcement.

CSX Corporation Price and EPS Surprise


CSX Corporation Price and EPS Surprise | CSX Corporation Quote

Stocks to Consider

Investors interested in the broader transportation sector may consider some other top-ranked stocks like American Airlines Group, Inc. (AAL - Free Report) , Allegiant Travel Company (ALGT - Free Report) and Alaska Air Group, Inc. (ALK - Free Report) , as our model shows that these stocks possess the right combination of elements to post an earnings beat in their next release.

American Airlines has an Earnings ESP of +4.62% and a Zacks Rank #1. The company is expected to release its second quarter results on Jul 28. You can see the complete list of today’s Zacks #1 Rank stocks here.

Allegiant Travel has an Earnings ESP of +5.25% and a Zacks Rank #3. The company will release its second quarter results on Jul 26.

Alaska Air Group has an Earnings ESP of +2.44% and a Zacks Rank #2. The company will announce its second quarter results on Jul 26.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>

More from Zacks Analyst Blog

You May Like