CSX Q2 Earnings: Mixed Performance Amid Challenges

CSX Corporation reported a 3% decline in total revenue to $3.6 billion in Q2, mainly due to lower coal and fuel prices. Earnings per share decreased by 10% YoY, but increased by 29% QoQ. The company faced challenges in its coal and intermodal segments, but highlighted operational recovery, cost efficiency, and strong customer engagement. Infrastructure projects and a positive industrial development pipeline were also discussed during the earnings call.

CSX Corporation (CSX) reported mixed second-quarter 2025 results, with earnings per share (EPS) beating the Zacks Consensus Estimate but total revenues falling short. The company's EPS of 44 cents exceeded the Zacks Consensus Estimate of 42 cents, marking a 10.2% year-over-year (YoY) decrease. Total revenues of $3.57 million missed the Zacks Consensus Estimate of $3.58 million and declined 3.4% YoY, primarily due to lower export coal prices, reduced fuel surcharge, and a decline in merchandise volume [1].

Operating income decreased 11% YoY to $1.28 billion, while total expenses increased 2% to $2.29 billion. The company's operating margin fell 320 basis points to 35.9%. Overall volumes rose marginally by 0.1% YoY, but revenue per unit decreased 4% YoY.

CSX's segmental performance showed challenges in the coal and intermodal segments. Merchandise revenues fell 2% YoY to $2.25 billion, while intermodal revenues decreased 3% to $491 million. Coal revenues dropped 15% to $477 million. Trucking revenues totaled $211 million, down 5% YoY. Other revenues grew 20% to $138 million.

The company exited the quarter with $387 million in cash and cash equivalents, down from $1.14 billion at the end of the prior quarter. Long-term debt remained flat at $18.5 billion. CSX generated $635 million of cash from operating activities in the reported quarter.

Joe Hinrichs, president and CEO, attributed the results to the skill and commitment of CSX's railroaders, who delivered sequential improvements in network fluidity and cost efficiency. He noted that while uncertainty continues to impact select industrial markets, the company remains focused on completing two major infrastructure projects that will strengthen its position for future growth.

For 2025, CSX expects total volume growth. It now expects lesser year-over-year revenue headwinds from lower export coal benchmarks and diesel prices. The company will continue to focus on operational excellence, labor productivity, and efficiency initiatives. Capital expenditures are expected to be roughly flat year over year, excluding hurricane rebuild spending.

Currently, CSX carries a Zacks Rank #3 (Hold).

References:
[1] https://finance.yahoo.com/news/csx-q2-earnings-came-ahead-151000191.html