A month has passed by because the final earnings report for CSX (CSX). Shares have added about 7.7% in that timeframe, outperforming the S&P 500.
Will the current constructive pattern proceed main as much as its subsequent earnings launch, or is CSX due for a pullback? Earlier than we dive into how buyers and analysts have reacted as of late, let’s take a fast have a look at the latest earnings report with a purpose to get a greater deal with on the essential catalysts.
Earnings Miss at CSX in Q3
CSX’s third-quarter 2024 earnings per share of 46 cents fell wanting the Zacks Consensus Estimate by two cents. Nevertheless, the underside line elevated on a year-over-year foundation on the again of upper revenues as freight volumes grew.
Whole revenues of $3.62 billion elevated 1% yr over yr pushed by merchandise pricing positive aspects and development in intermodal and merchandise volumes. The positives outweighed the negatives like low coal revenues, decreased gasoline surcharge and decrease different revenues.
The third-quarter working revenue elevated 7% to $1.35 billion. Whole bills had been up 2% yr over yr to $2.3 billion. This improve in working bills was because of the 21% improve in gasoline prices to $276 million. Total volumes elevated 3% yr over yr.
Segmental Efficiency
Merchandise revenues improved 6% yr over yr to $2.23 billion within the reported quarter. Merchandise volumes rose 3% yr over yr to $683 million. Segmental income per unit elevated 2%.
Intermodal revenues decreased 2% yr over yr to $509 million. Segmental volumes elevated 3% whereas income per unit decreased 5%.
Coal revenues fell 7% yr over yr to $553 million within the reported quarter. Coal volumes decreased 2%. Segmental income per unit fell 5%.
Trucking revenues totaled $214 million, down 2% yr over yr. Different revenues plunged 15% to $112 million within the reported quarter.
Liquidity
CSX exited the third quarter of 2024 with money and money equivalents of $1.64 billion in contrast with $1.35 billion on the finish of 2023. Lengthy-term debt totaled $18.53 billion in contrast with $17.97 billion on the finish of 2023.
CSX generated $3.86 billion of money from working actions within the reported quarter. Free money move got here in at $2.22 billion (earlier than fee of dividends).
Outlook
CSX expects a current-year capex of roughly $2.5 billion (excluding the rebuild of infrastructure broken by current hurricanes).
Administration expects volumes to develop modestly within the ultimate quarter of 2024. Revenues within the fourth quarter are more likely to be down reasonably (roughly by $200 million) as a result of decrease gasoline costs and softer coal markets.
How Have Estimates Been Transferring Since Then?
Up to now month, buyers have witnessed a downward pattern in estimates revision.
The consensus estimate has shifted -10.61% as a result of these modifications.
VGM Scores
Presently, CSX has a mean Development Rating of C, although it’s lagging a bit on the Momentum Rating entrance with a D. Following the very same course, the inventory was allotted a grade of D on the worth aspect, placing it within the backside 40% for this funding technique.
Total, the inventory has an combination VGM Rating of D. For those who aren’t centered on one technique, this rating is the one you need to be excited about.
Outlook
Estimates have been broadly trending downward for the inventory, and the magnitude of those revisions signifies a downward shift. It is no shock CSX has a Zacks Rank #4 (Promote). We count on a under common return from the inventory within the subsequent few months.
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