CSX's Q4 2024 Earnings Call: Navigating Contradictions in Coal Pricing, Service Impacts, and Margin Expectations

Volume Growth and Market Challenges:
- CSX achieved 2% volume growth for the full year, outpacing the industrial economy despite constraints and challenges such as the Francis Scott Key Bridge collapse, hurricanes, and weak commodity prices.
- The growth was driven by effective customer service, improved operational efficiency, and strategic labor agreements, despite weak market conditions.

Coal Segment and Export Volumes:
- Coal revenue declined 20% in Q4, with 7% lower volume, due to reduced global benchmark pricing and production issues.
- Export coal volume grew by 9% for the full year, despite challenges, highlighting the importance of global markets for CSX's coal business.

Operational Efficiency and Cost Management:
- CSX saw improvements in fuel efficiency and reduced fuel costs by $86 million, driven by operating initiatives and efficiency savings.
- The company reduced FRA accidents and increased employee training, focusing on safety and capital work to improve overall efficiency.

Merchandise and Intermodal Performance:
- Merchandise revenue was 3% higher for the full year, with chemicals and forest products showing growth.
- Intermodal revenue declined 5% in Q4, with a 4% volume increase, impacted by lower diesel prices and seasonal factors.

Earnings and Financial Outlook:
- Reported operating income and earnings per share fell by 16% in Q4, impacted by a $108 million goodwill impairment and headwinds from hurricanes and coal pricing.
- CSX expects low to mid-single-digit volume growth in 2025, with challenges from coal plant closures and pricing pressures, despite operational improvements.