CSX Corporation CSX reported first-quarter 2017 earnings (excluding restructuring charge worth $173 million) of 51 cents per share, which beat the Zacks Consensus Estimate of 43 cents. Also, quarterly earnings were 37.8% above the year-ago figure. Results were aided by higher revenues.
Revenues of $2,869 million outpaced the Zacks Consensus Estimate of $2,729.7 million and improved 10% year over year owing to a 3% increase in overall volumes. The company saw growth in volumes across most key segments. The outperformance pleased investors as the stock gained in after-market trading on Apr 20.
Also, first-quarter operating income (on a reported basis) improved 1% year over year to $712 million. While, operating ratio (operating expenses as a percentage of revenues) contracted 210 basis points to 75.2%, operating expenses increased 13% year over year to $2,157 million, mainly due to restructuring charges.
Adjusted operating income in the first quarter was $885 million. On an adjusted basis, operating ratio for the reported quarter was 69.2%.
CSX Corp.’s newly appointed CEO, E. Hunter Harrison, who is highly experienced in the railroad space, intends to drive growth at CSX Corp. by slashing costs. He previously served fellow railroad operator, Canadian Pacific Railway Limited CP, as CEO.
Segmental Performance
Merchandise revenues grew 6% year over year to $1,839 million in the quarter owing to a 4% rise in volumes. This was largely due to increase of 21%, 15% and 9% in revenues in the Minerals, Metals and Equipment and Automotive segments, respectively.
Coal revenues surged 31% year over year to $522 million due to a 3% improvement in volumes.
Intermodal revenues climbed 7% year over year to $434 million. On a year-over-year basis, volumes increased 1%.
Other revenues grossed $74 million, down 8% year over year.
CSX Corporation Price, Consensus and EPS Surprise
CSX Corporation Price, Consensus and EPS Surprise | CSX Corporation Quote
Liquidity
This Zacks Rank #2 (Buy) company exited the first quarter with cash and cash equivalents of $930 million compared with $603 million at the end of 2016. Long-term debt totaled $10,963 million, almost flat sequentially. For the period ending Mar 31, 2017, net cash provided by operating activities was $1,043 million compared with $754 million in the year-ago period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Investors interested in the railroad space are also keenly awaiting for first-quarter earnings reports from key players like Canadian National Railway Company CNI and Kansas City Southern KSU in the coming days. Kansas City Southern is scheduled to report on Apr 21, while Canadian National will report on Apr 24.
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Zacks Investment Research
April 20, 2017 at 05:02PM
from Zacks Equity Research
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