“CSX reported EPS of $1.08, up 3% y/y and above our and the Street’s $1.02 and $1.01 projections, respectively,” said Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl. “Excluding a $22 million non-railroad asset impairment related to an intermodal terminal sale agreement, EPS would’ve been $1.10. Operating income of ~$1.29 billion was above our $1.24 billion estimate and the Street’s $1.23 billion. Revenue came in at $2.98 billion, slightly below our estimate and slightly above the street’s. The operating ratio (OR) of 56.8% was ~190 bps improved y/y, was ~160 bps better than our estimate, and was ~190 bps better than the Street’s.” Similar to 2Q19, records were set but revenue for the third quarter decreased by 5% over the prior year to $2.98 billion, as merchandise revenue growth was more than offset by coal and intermodal declines, CSX noted. Its expenses decreased 8% year-over-year to $1.69 billion, driven by continued efficiency gains and volume-related savings. The operating income was roughly flat at $1.29 billion compared to the same period last year. “Mgmt maintained their full-year revenue growth outlook of a decline of 1-2%, OR outlook of sub-60% and capital expenditure guide of $1.6 billion to $1.7 billion,” said Seidl. “We note that mgmt had lowered the revenue growth in 2Q from low single-digit growth to this current decline of 1-2% outlook. Though macroeconomic uncertainty undoubtedly remains, we believe that CSX’s actions are a subtle but positive referendum that their business levels are stable. It is our opinion that the company’s full-year OR outlook is extremely achievable.” CSX’s entire 3Q2019 earnings presentation can be found here. The post CSX Sets Operating Ratio Record in 3Q19 appeared first on Railway Age. Continue reading...
