CSX Q4 Earnings & Revenues Lag Estimates, Decrease Year Over Year

Core Viewpoint - CSX Corporation reported disappointing fourth-quarter 2024 results, with both earnings and revenues falling short of expectations, indicating challenges in revenue generation and operational efficiency [1][2]. Financial Performance - Quarterly earnings per share were 42 cents, missing the Zacks Consensus Estimate by one cent and reflecting a 6.6% year-over-year decline due to lower revenues [1]. - Total revenues amounted to $3.53 million, below the Zacks Consensus Estimate of$3.58 million, and decreased by 3.8% year over year, primarily due to lower fuel recovery and coal revenue [2]. - Operating income for the fourth quarter decreased by 16% year over year to $1.11 billion, while total expenses rose by 3$2.43 billion [3]. Segmental Performance - Merchandise revenues increased by 0.4% year over year to $2.19 billion, but fell short of the estimate of$2.24 billion, with merchandise volumes rising by 0.3% [4]. - Intermodal revenues decreased by 5% year over year to $526 million, also below the estimate of$531.2 million, despite a 4% increase in segmental volumes [4]. - Coal revenues plummeted by 20% year over year to $499 million, significantly lower than the estimate of$529.7 million, with coal volumes down by 7% [5]. Liquidity and Cash Flow - CSX ended the fourth quarter with cash and cash equivalents of $933 million, a decrease from$1.64 billion at the end of the previous quarter, while long-term debt was reported at $17.89 billion [6]. - The company generated$1.38 billion in cash from operating activities during the reported quarter [6]. 2025 Guidance - For 2025, CSX anticipates total volume growth in the low to mid-single digits, with intermodal and merchandise momentum expected to be supported by conversions and industrial development [7]. - Coal volumes are projected to decline due to facility shutdowns and mine production issues, impacting overall revenue [7]. - Full-year revenues are likely to be influenced by lower coal benchmarks, diesel prices, and volume mix, particularly in the first half of the year [7]. Operational Focus - CSX plans to continue focusing on efficiency initiatives and labor productivity, with hurricane recovery and the Howard Street Tunnel project expected to affect operating income [8]. - Capital expenditures are expected to remain roughly flat year over year, excluding spending related to hurricane rebuilding [8]. Market Performance - CSX currently holds a Zacks Rank of 4 (Sell), indicating a negative outlook in the market [9]. - Over the past six months, CSX shares have gained only 0.2%, underperforming the industry average increase of 2.7% [10].