CSX Corporation CSX reported first-quarter 2020 earnings of $1 per share, beating the Zacks Consensus Estimate of 92 cents. However, the bottom line slipped approximately 2% year over year due to a drop in revenues.
The earnings beat despite coronavirus-related adversities perhaps pleased investors, sending shares of the company up more than 2% in after-hour trading on Apr 22.
Meanwhile, total revenues of $2,855 million lagged the consensus estimate of $2,877 million and declined approximately 5% year over year owing to lower coal and other revenues.
First-quarter operating income dropped 3% year over year to $1.18 billion. Operating ratio (operating expenses as a percentage of revenues) improved to 58.7% from 59.5% in the prior-year quarter, with total expenses declining 7% from the year-ago period. 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 inched up 3% year over year to $1,927 million in the quarter under review. Merchandise volumes increased 2%.
Coal revenues plunged 25% year over year to $405 million in the reported quarter. Coal volumes also contracted 15% year over year due to lower domestic and export coal volumes.
Moreover, Intermodal revenues slid 1% year over year to $422 million. Volumes were flat year over year, with international volumes dwindling due to coronavirus-led closure of operations in China.
Other revenues too fell 40% to $101 million in the reported quarter.
Liquidity & Share Buyback
This Zacks Rank #4 (Sell) company exited the first quarter with cash and cash equivalents of $1,995 million compared with $958 million at the end of December 2019. Long-term debt totaled $16,477 million compared with $15,993 million at 2019-end. As of Mar 31, 2020, net cash provided by operating activities was $1,178 million compared with $1,173 million in the year-earlier period.
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During the first quarter, the company repurchased 9 million shares at an average price of $64.75.
Suspension of Guidance
Taking the uncertainty surrounding coronavirus into consideration, CSX withdrew financial outlook. To combat the low-volume scenario caused by the health crisis, the company is controlling expenses as well as evaluating future capital spending.
Investors interested in the broader Transportation sector are keenly awaiting first-quarter earnings reports from key players like Canadian National Railway Company CNI, Norfolk Southern Corporation NSC and Southwest Airlines Co. LUV. While Canadian National and Southwest Airlines will release earnings numbers on Apr 27 and Apr 28, respectively, Norfolk Southern will announce the same on Apr 29.
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