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CSX Beats Estimates; Weak Outlook Ahead

CSX Rail and intermodal carrier CSX Corp. (NASDAQ: CSX – $23.70) reported net income for the fourth quarter of $466 million, or $0.48 per share, beating the consensus of $0.46 per share. This is down, however, from the same period a year ago with net income of $491 million, or $0.49 per share. Total revenue of $2.78 billion missed the estimated $2.85 billion, and declined 13% from $3.19 billion for the fourth quarter of 2014. Revenue suffered as pricing gains were more than offset by the impact of lower fuel recovery, a 6 percent volume decline and continued transition in the company’s business mix. Expenses also decreased 13%, primarily reflecting reduced fuel prices, lower volume-related costs and efficiency gains. As a result, operating income declined 12%, while the operating ratio improved 20 basis points to 71.6 percent. 

Jacksonville, Florida-based CSX Corp., now trading on the NASDAQ, delivered relatively solid results in 2015 by balancing strong service with compelling cost control and efficiency gains despite a market challenged by low commodity prices and global impacts of the strong U.S. dollar, according to the company. With negative global and industrial market trends projected for 2016, full-year earnings per share are expected to be down compared to 2015. CSX said it will continue to be rigorous about efficiency, resources and service quality to maximize shareholder value and achieve a mid-60s operating ratio longer term. The good quality shares, trading at the low-end of their 52-week range, can be held for eventual recovery.



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