Does CSX Deserve More Credit for Its Q4 Earnings Beat?

CSX Corp. (NASDAQ: CSX) released its fourth-quarter financial results after the markets closed on Thursday. The firm said that it had $0.99 in earnings per share (EPS) and $2.89 billion in revenue, compared with consensus estimates that called for $0.97 in EPS and $2.92 billion in revenue. The same period from last year had $1.01 in EPS and $3.14 billion in revenue.

Overall, revenue for the fourth quarter decreased 8% versus prior year due to lower volumes and negative mix from coal market headwinds.

Expenses decreased 9% year over year to $1.73 billion, driven by continued efficiency gains and volume-related savings. Operating income was down 8% to $1.15 billion compared to the same period last year.

The operating ratio — a key performance metric for railroads — improved to 60% from 60.3% a year earlier. Total shipment volume fell 7% compared with analysts projected 6% decline.

For the 2019 full year, CSX generated net earnings of $3.33 billion, or $4.17 per share, versus $3.31 billion, or $3.84 per share in 2018, an increase of 1% and 9%, respectively. Analysts were calling for $4.15 in EPS and $11.97 billion in revenue for the full year.

James M. Foote, president and CEO, commented:

The railroad has never run better and we are delivering great service to our customers. What is really amazing is how our employees stepped up to produce efficiencies during tough economic conditions.

Shares of CSX closed Thursday at $76.74, with a 52-week range of $63.14 to $80.73. The consensus analyst price target is $77.24. Following the announcement, the stock was down over 4% at $73.40 in the after-hours session.