CSX Corporation CSX reported lower-than-expected results in second-quarter 2020 due to reduced economic activity on account of coronavirus. Following the disappoinment, shares of the company dipped 1.4% in after-hour trading on Jul 22.
The company’s earnings of 65 cents per share missed the Zacks Consensus Estimate of 67 cents. Moreover, the bottom line plunged 39.8% year over year due to a drop in revenues. Total revenues of $2,255 million also lagged the Zacks Consensus Estimate of $2,306 million and declined 26.3% year over year owing to coronavirus-led volume declines.
Second-quarter operating income fell 37% to $828 million. Operating ratio (operating expenses as a percentage of revenues) deteriorated to 63.3% from 57.4% in the prior-year quarter as a result of low revenues. Notably, lower the value of the metric, the better. Total expenses declined 19% year over year in the reported quarter. Costs reduced primarily due to increased efficiency.
CSX Corporation Price, Consensus and EPS Surprise
CSX Corporation price-consensus-eps-surprise-chart | CSX Corporation Quote
Merchandise revenues plummeted 22% year over year to $1,508 million in the quarter under review. Merchandise volumes also declined 22%.
Coal revenues plunged 48% year over year to $287 million in the reported quarter. Coal volumes contracted 44% due to lower domestic and export coal volumes.
Moreover, Intermodal revenues slid 18% year over year to $359 million. Volumes declined 11% with both domestic and international volumes dwindling due to coronavirus-led global economic impacts.
Other revenues too fell 19% to $101 million in the reported quarter.
Liquidity & Share Buyback
This Zacks Rank #4 (Sell) company exited the second quarter with cash and cash equivalents of $2,391 million compared with $958 million at the end of December 2019. Long-term debt totaled $16,128 million compared with $15,993 million at 2019-end. As of Jun 30, 2020, net cash provided by operating activities was $2,184 million, compared with $2,267 million in the year-earlier period.
As of Jun 30, 2020, CSX repurchased 10 million shares for $616 million.
Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported second-quarter earnings numbers.
Delta, carrying a Zacks Rank #4, incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share in the June quarter, wider than the Zacks Consensus Estimate of a loss of $3.97. Total revenues in the quarter came in at $1,468 million, surpassing the Zacks Consensus Estimate of $1,400.8 million.
J.B. Hunt, carrying a Zacks Rank #3 (Hold), reported second-quarter earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million also beat the Zacks Consensus Estimate of $2,060.9 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 company’s total revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million.
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