CSX's Q2 2025 Earnings Call: Navigating Contradictions in Operations, Intermodal Demand, and Coal Market Outlook

Operational challenges and recovery timeline, intermodal market and tariff impact, coal volume guidance and market conditions, intermodal market and customer demand, coal market outlook are the key contradictions discussed in CSX's latest 2025Q2 earnings call.



Operational Recovery and Network Performance:
- CSX's network performance showed significant improvement, with key metrics such as velocity, dwell, and trip plan compliance improving and reaching levels not seen in recent history.
- This recovery was driven by clear priorities and effective actions taken to stabilize the network, following challenges in the first quarter.

Volume and Revenue Trends:
- Total volume was flat compared to last year, with a 4% sequential increase in Q2, driven by merchandise and coal improvements.
- Total revenue was $3.6 billion, down 3% from the previous period due to lower coal and fuel prices, but improved by 4% sequentially.

Margin and Expense Management:
- The reported operating margin increased by 550 basis points sequentially despite a 320 basis points decline year-over-year.
- Expenses increased by 2% or $38 million year-over-year, influenced by network disruption costs, inflation, and higher depreciation.

Major Projects and Capacity Expansion:
- CSX is on track to complete major projects such as the Howard Street Tunnel and Blue Ridge rebuild, which will open two key North-South routes and enable double stack intermodal on the I-95 corridor.
- These projects are expected to open up significant capacity and throughput, contributing to future growth.