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CSX Q4 Earnings Top on Low Costs, Stock Down on Revenue Miss

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CSX Corporation (CSX - Free Report) reported fourth-quarter 2019 earnings of 99 cents per share, beating the Zacks Consensus Estimate of 97 cents. However, the bottom line slipped approximately 2% year over year due to lower revenues.

Meanwhile, total revenues of $2,885 million lagged the Zacks Consensus Estimate of $2,918.2 million and also decreased 8.2% year over year. The top line was affected by lower volumes and coal market adversities. The revenue miss perhaps disappointed investors. Consequently, the stock dipped more than 3% in after-hours trading on Jan 16.

Fourth-quarter operating income was down 8% year over year to $1.15 billion. Operating ratio (operating expenses as a percentage of revenues) improved to 60% from 60.3% in the prior-year quarter with total expenses declining 9% from the year-ago period. Costs reduced primarily due to increased efficiency and volume-related savings.

CSX Corporation Price, Consensus and EPS Surprise


CSX Corporation Price, Consensus and EPS Surprise

CSX Corporation price-consensus-eps-surprise-chart | CSX Corporation Quote

Segmental Performance

Merchandise revenues decreased 3% year over year to $1,860 million in the quarter under review. Merchandise volumes also slid 3% year over year.

Coal revenues plunged 22% year over year to $459 million in the reported quarter. Coal volumes also contracted 17% year over year due to lower domestic and export coal volumes.

Moreover, Intermodal revenues dropped 9% year over year to $449 million. Volumes also shrank 7% on a year-over-year basis with both domestic and international volumes dwindling due to rationalization of low-density lanes.

Other revenues too fell 22% to $117 million in the reported quarter.

Liquidity & Share Buyback

This Zacks Rank #3 (Hold) company exited the fourth quarter with cash and cash equivalents of $958 million compared with $858 million at the end of December 2018. Long-term debt totaled $15,993 million compared with $14,739 million at 2018 end. As of Dec 31, 2019, net cash provided by operating activities was $4,850 million compared with $4,641 million in the year-earlier period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

During 2019, the company repurchased 48 million shares at an average price of $70.54.

Annual Results

For 2019, the company’s earnings of $4.17 per share beat the Zacks Consensus Estimate of $4.16. However, total revenues of $11.94 billion missed the Zacks Consensus Estimate of $11.96 billion. While the bottom line increased 9% year over year, the top line decreased 3%.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting fourth-quarter 2019 earnings reports from key players like United Parcel Service, Inc. (UPS - Free Report) , Union Pacific Corporation (UNP - Free Report) and Southwest Airlines Co. (LUV - Free Report) . While Union Pacific and Southwest will report earnings numbers on Jan 23, UPS will announce financial results on Jan 30.

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