CSX Q3 Earnings Meet, Rise Y/Y, Revenues Miss Estimates

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CSX CorporationCSX reported third-quarter 2017 earnings of 51 cents per share, in line with the Zacks Consensus Estimate. Quarterly earnings came in 6.3% higher than the year-ago figure.

Revenues of $2,743 million missed the Zacks Consensus Estimate of $2,769.4 million. However, the figure improved 1.2% year over year owing to core pricing gains. Overall volumes also inched up 1% year over year.

The revenue miss disappointed investors. Consequently, the stock slid 1.6% in early trading.

Also, third-quarter operating income (on a reported basis) improved 4% year over year to $876 million. While the operating ratio (operating expenses as a percentage of revenues) reportedly improved 90 basis points to 68.1%, operating expenses remained flat year over year to $1,867 million.

Adjusted operating income in the third quarter was $877 million. On an adjusted basis, the operating ratio for the reported quarter was 68%.

Driven by improved efficiencies, CSX expects the bottom line to expand between 20% and 25% in 2017 on a reported basis over 2016 levels. Operating ratio in the high end of mid-60s is expected in 2017. The company expects free cash flow before dividends (excluding restructuring costs) of around $1.5 billion in 2017.

Segmental Performance

Merchandise revenues slipped 3% year over year to $1,688 million in the quarter.

Coal revenues rose 10% year over year to $514 million owing to 5% expansion in volumes.

Intermodal revenues improved 5% year over year to $446 million. On a year-over-year basis, volumes expanded 5%.

Other revenues grossed $95 million, up 23% year over year.

CSX Corporation Price, Consensus and EPS Surprise

CSX Corporation Price, Consensus and EPS Surprise | CSX Corporation Quote

Liquidity & Buyback

This Zacks Rank #4 (Sell) company exited the third quarter with cash and cash equivalents of $591 million compared with $603 million at the end of 2016. Long-term debt totaled $11,788 millioncompared with $10,962 millionat the same time around. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

For the period ending Sep 30, 2017, net cash provided by operating activities was$2,861 million compared with $2,488 million in the year-ago period. During the third quarter, the company completed a $1.5 billion share repurchase program, announced in April and expanded in July.

Upcoming Releases

Investors interested in the railroad space are keenly waiting for third-quarter earnings reports from key players like Canadian National Railway Company CNI , Kansas City Southern KSU and Norfolk Southern Corporation NSC . Canadian National is scheduled to report third-quarter results on Oct 24, while Kansas City Southern and Norfolk Southern will report on Oct 20 and Oct 25, respectively.

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Kansas City Southern (KSU): Free Stock Analysis Report

CSX Corporation (CSX): Free Stock Analysis Report

Canadian National Railway Company (CNI): Free Stock Analysis Report

Norfolk Souther Corporation (NSC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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