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CSX Q3 Earnings & Revenues Top Estimates, Rise Year Over Year

CSX Corporation (CSX) reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.

Quarterly earnings of 52 cents per share beat the Zacks Consensus Estimate of 49 cents and improved 20.9% year over year.

Total revenues of $3,895 million outperformed the Zacks Consensus Estimate of $3,757.1 million. The top line increased 18.3% year over year on the back of higher fuel surcharge, pricing gains, an increase in volumes, and an increase in storage and other revenues. Overall revenues per unit increased 27%.

Third-quarter operating income climbed 10% to $1,579 million. The operating ratio (operating expenses as a percentage of revenues) improved to 59.5% from 56.4% in the prior-year quarter, with total expenses increasing 25% year over year.

CSX Corporation Price, Consensus and EPS Surprise

CSX Corporation price-consensus-eps-surprise-chart | CSX Corporation Quote

Segmental Performances

Merchandise revenues climbed 14% year over year to $2,143 million in the reported quarter on the back of price and higher fuel surcharge revenues. Merchandise volumes remained almost flat at $657 million. Segmental revenue per unit increased 12%.

Intermodal revenues augmented 19% year over year to $604 million. Volumes rose 2% year over year. The strength in the international business was partially offset by lower domestic volumes. Segmental revenue per unit increased 16%.

Coal revenues ascended 36% year over year to $624 million in the reported quarter. The upside came as pricing continued to benefit from solid export benchmarks.Coal volumes decreased 2% due to production issues at the mine, infrastructure constraints at the export terminals and general manpower shortages. Segmental revenue per unit surged 38%.

Effective third-quarter 2021, CSX introduced a segment called Trucking comprising the operations of Quality Carriers, acquired by CSX last year. Revenues from the segment totaled $251 million, up 26% year over year. The uptick was backed by solid core pricing and higher fuel recovery.

Other revenues jumped 13% to $273 million in the reported quarter. The uptick was owing to higher intermodal storage and equipment usage fees.

Liquidity, Dividends and Buyback

CSX exited the third quarter with cash and cash equivalents of $2,311 million compared with $724 million at the end of June 2022. Long-term debt totaled $17,895 million compared with $15,974 million in June 2022. As of Sep 30, 2022, CSX rewarded its shareholders through buybacks and dividends with $1,195 million and $212 million, respectively.

Outlook

CSX continues to expect double-digit revenue and operating income growth for the full-year 2022.

Currently, CSX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Transportation Companies

Delta AirLines’DAL third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss. Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.

DAL reported revenues of $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by the high air-travel demand, total revenues increased more than 52% on a year-over-year basis.

United Airlines’ UAL third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. An upbeat in air-travel demand aided results.

In the year-ago quarter, UAL incurred a loss of $1.02 per share when air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable quarter at UAL since the onset of the pandemic.

Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to an upbeat in air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.2% from third-quarter 2019 (pre-coronavirus) levels.

J.B. Hunt Transport Services, Inc. JBHT reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.JBHT’s quarterly earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.45 and improved 36.7% year over year.

JBHT’s operating revenues of $3,838.3 million also outperformed the Zacks Consensus Estimate of $3803.4 million. The top line jumped 22.1% year over year on the back of strength across — Dedicated Contract Services, Intermodal, Truckload and Final Mile Services segments. Total operating revenues, excluding fuel surcharges, rose 12.4% year over year.


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