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Why Is CSX (CSX) Up 8.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for CSX (CSX - Free Report) . Shares have added about 8.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CSX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at CSX in Q4
CSX's fourth-quarter 2023 earnings per share of 45 cents beat the Zacks Consensus Estimate of 44 cents. However, the bottom line declined 8.2% year over year.
Total revenues of $3,680 million surpassed the Zacks Consensus Estimate of $3,637.8 million. The top line decreased 1.3% year over year due to lower intermodal storage revenues, reduced fuel surcharge, the effect of lower global benchmark coal prices and a decline in trucking revenues. These factors offset the effects of higher merchandise yields and coal volume growth.
Fourth-quarter operating income fell 10% to $1.32 billion. The operating ratio (operating expenses as a percentage of revenues) rose to 64.1% from 60.9% in the prior-year quarter, with total expenses decreasing 4% year over year.
CSX expects low to mid-single digit total volume and revenue growth for 2024 over 2023 actuals.
Segmental Performances
Merchandise revenues improved 5% year over year to $2,182 million in the reported quarter. The metric has surged 4.9% (lower than reported) as per our estimate. Merchandise volumes grew 3% to $648 million. Segmental revenue per unit increased 3%.
Intermodal revenues fell 4% year over year to $552 million. The metric has fallen 18% (wider than reported) as per our estimate. Segmental revenue per unit decreased 4%.
Coal revenues inched down 1% year over year to $620 million in the reported quarter. The metric has fallen 1.5% (wider than reported) as per our estimate. Coal volumes increased 3%. Segmental revenue per unit fell 4%.
Trucking revenues totaled $204 million, down 10% year over year. The metric has fallen 9.1% (narrower than reported) as per our estimate.
Other revenues plunged 47% to $122 million in the reported quarter.
Liquidity and Buyback
CSX exited fourth-quarter 2023 with cash and cash equivalents of $1,353 million compared with $1,958 million at the end of fourth-quarter 2022. Long-term debt totaled $17,975 million compared with $17,896 million at the end of fourth-quarter 2022.
As of Dec 31, 2023, CSX rewarded its shareholders through buybacks worth $18 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, CSX has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, CSX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CSX belongs to the Zacks Transportation - Rail industry. Another stock from the same industry, Canadian National (CNI - Free Report) , has gained 6.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
CN reported revenues of $3.28 billion in the last reported quarter, representing a year-over-year change of -1.8%. EPS of $1.48 for the same period compares with $1.55 a year ago.
For the current quarter, CN is expected to post earnings of $1.26 per share, indicating a change of -6.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CN. Also, the stock has a VGM Score of D.
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Why Is CSX (CSX) Up 8.3% Since Last Earnings Report?
It has been about a month since the last earnings report for CSX (CSX - Free Report) . Shares have added about 8.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CSX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at CSX in Q4
CSX's fourth-quarter 2023 earnings per share of 45 cents beat the Zacks Consensus Estimate of 44 cents. However, the bottom line declined 8.2% year over year.
Total revenues of $3,680 million surpassed the Zacks Consensus Estimate of $3,637.8 million. The top line decreased 1.3% year over year due to lower intermodal storage revenues, reduced fuel surcharge, the effect of lower global benchmark coal prices and a decline in trucking revenues. These factors offset the effects of higher merchandise yields and coal volume growth.
Fourth-quarter operating income fell 10% to $1.32 billion. The operating ratio (operating expenses as a percentage of revenues) rose to 64.1% from 60.9% in the prior-year quarter, with total expenses decreasing 4% year over year.
CSX expects low to mid-single digit total volume and revenue growth for 2024 over 2023 actuals.
Segmental Performances
Merchandise revenues improved 5% year over year to $2,182 million in the reported quarter. The metric has surged 4.9% (lower than reported) as per our estimate. Merchandise volumes grew 3% to $648 million. Segmental revenue per unit increased 3%.
Intermodal revenues fell 4% year over year to $552 million. The metric has fallen 18% (wider than reported) as per our estimate. Segmental revenue per unit decreased 4%.
Coal revenues inched down 1% year over year to $620 million in the reported quarter. The metric has fallen 1.5% (wider than reported) as per our estimate. Coal volumes increased 3%. Segmental revenue per unit fell 4%.
Trucking revenues totaled $204 million, down 10% year over year. The metric has fallen 9.1% (narrower than reported) as per our estimate.
Other revenues plunged 47% to $122 million in the reported quarter.
Liquidity and Buyback
CSX exited fourth-quarter 2023 with cash and cash equivalents of $1,353 million compared with $1,958 million at the end of fourth-quarter 2022. Long-term debt totaled $17,975 million compared with $17,896 million at the end of fourth-quarter 2022.
As of Dec 31, 2023, CSX rewarded its shareholders through buybacks worth $18 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, CSX has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, CSX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CSX belongs to the Zacks Transportation - Rail industry. Another stock from the same industry, Canadian National (CNI - Free Report) , has gained 6.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
CN reported revenues of $3.28 billion in the last reported quarter, representing a year-over-year change of -1.8%. EPS of $1.48 for the same period compares with $1.55 a year ago.
For the current quarter, CN is expected to post earnings of $1.26 per share, indicating a change of -6.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CN. Also, the stock has a VGM Score of D.