CSX Corp. Announces Fourth Quarter and Full Year 2023 Results
- None.
- Operating income and net earnings decreased for the fourth quarter and full year of 2023
- Revenue declined 1% year-over-year
- Diluted EPS decreased 8% for the quarter and 5% for the full year
CSX Corp.'s Q4 operating income and net earnings decline, alongside a full-year operating income dip, reflects a challenging macroeconomic environment. The decrease in operating income by 10% and net earnings by 8% in Q4, as well as an 8% and 5% decrease in operating income and diluted EPS respectively for the full year, suggests margin compression. This could be attributed to several factors, such as reduced fuel surcharge revenue, lower global benchmark coal prices and a decline in trucking revenue. The operating ratio, an important measure of efficiency that calculates expenses as a percentage of revenue, worsened to 64.1% for the quarter, indicating higher costs relative to revenue.
Investors should consider the impact of these financials on CSX's valuation. The company's ability to navigate economic headwinds will be critical for future performance. The reported growth in merchandise volume may provide a buffer against declines in other segments. However, the competitive landscape and regulatory risks in the transportation sector should also be closely monitored.
The transportation sector is often seen as a barometer for economic activity. CSX's report of a 1% increase in total volume, with merchandise and coal volumes up by 3%, suggests a moderate growth in certain segments of the economy. However, the flat intermodal volume and decline in revenue highlight the complexities of the current market dynamics. The transportation industry is facing challenges from supply chain disruptions and shifts in consumer demand.
Furthermore, the shift in revenue composition, with stronger merchandise pricing but reduced intermodal storage revenue and fuel surcharges, indicates changing market conditions that CSX must adapt to. The company's focus on customer service and network performance, as highlighted by the CEO, will be essential in maintaining competitiveness and seeking profitable growth opportunities.
CSX's financial results provide insights into broader economic trends, such as the impact of fluctuating fuel costs and commodity prices on corporate earnings. The decline in net earnings and operating income, despite a slight increase in volume, indicates that the company is facing cost pressures, potentially from inflationary trends affecting the broader economy. The lower global benchmark coal prices also reflect shifts in energy markets that could have wider implications for the transportation and energy sectors.
It is essential to analyze these results within the context of the current economic cycle and potential policy changes that could affect the transportation industry. For instance, infrastructure investments and environmental regulations could alter the demand for coal transportation and intermodal services. Investors should consider these macroeconomic factors when assessing the long-term prospects of CSX and the transportation sector as a whole.
JACKSONVILLE, Fla., Jan. 24, 2024 (GLOBE NEWSWIRE) -- CSX Corp. (NASDAQ: CSX) today announced fourth quarter 2023 operating income of
For the full year 2023, CSX operating income of
“Throughout 2023, our railroad demonstrated reliable, industry-leading network performance, and the ONE CSX team delivered consistent results through a dynamic economic environment by focusing on excellent customer service,” said Joe Hinrichs, president and chief executive officer. “Our railroad is running well, we have the right team and resources in place, and we look forward to building on our positive momentum with profitable growth over this next year.”
Fourth Quarter Financial Highlights
- Revenue totaled
$3.68 billion for the quarter, declining1% year-over-year as the effects of volume growth and favorable merchandise pricing were more than offset by lower intermodal storage revenue, reduced fuel surcharge, the effect of lower global benchmark coal prices, and a decline in trucking revenue. - Operating income of
$1.32 billion decreased10% compared to the same period in 2022. CSX’s operating ratio was64.1% for the quarter. - Diluted EPS of
$0.45 decreased8% from$0.49 in the prior year.
Full Year 2023 Financial Highlights
- Revenue totaled
$14.66 billion in 2023, decreasing1% year-over-year as the impacts of a decline in intermodal storage revenue, reduced fuel surcharge, lower global benchmark coal prices, and a decrease in intermodal volume more than offset contributions from stronger merchandise pricing and higher merchandise and coal volume. - Operating income of
$5.56 billion decreased8% compared to 2022, with last year’s results inclusive of gains of$144 million from the property sale agreement with the Commonwealth of Virginia. CSX’s operating ratio was62.1% for the full year 2023. - Diluted EPS of
$1.85 decreased5% from$1.95 in the prior year.
CSX executives will conduct a conference call with the investment community this afternoon, January 24, at 4:30 p.m. Eastern Time. Investors, media and the public may listen to the conference call by dialing 1-888-510-2008. For callers outside the U.S., dial 1-646-960-0306. Participants should dial in 10 minutes prior to the call and enter in 3368220 as the passcode.
In conjunction with the call, a live webcast will be accessible and presentation materials will be posted on the company's website at http://investors.csx.com. Following the earnings call, a webcast replay of the presentation will be archived on the company website.
This earnings announcement, as well as additional detailed financial information, is contained in the CSX Quarterly Financial Report available through the company’s website at http://investors.csx.com and on Form 8-K with the Securities and Exchange Commission.
About CSX and its Disclosures
CSX, based in Jacksonville, Florida, is a premier transportation company. It provides rail, intermodal and rail-to-truck transload services and solutions to customers across a broad array of markets, including energy, industrial, construction, agricultural, and consumer products. For nearly 200 years, CSX has played a critical role in the nation's economic expansion and industrial development. Its network connects every major metropolitan area in the eastern United States, where nearly two-thirds of the nation's population resides. It also links more than 240 short-line railroads and more than 70 ocean, river and lake ports with major population centers and farming towns alike.
This announcement, as well as additional financial information, is available on the company's website at http://investors.csx.com. CSX also uses social media channels to communicate information about the company. Although social media channels are not intended to be the primary method of disclosure for material information, it is possible that certain information CSX posts on social media could be deemed to be material. Therefore, we encourage investors, the media, and others interested in the company to review the information we post on X, formerly known as Twitter, (http://twitter.com/CSX) and on Facebook (http://www.facebook.com/OfficialCSX). The social media channels used by CSX may be updated from time to time. More information about CSX Corporation and its subsidiaries is available at www.csx.com.
Non-GAAP Disclosure
CSX reports its financial results in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). CSX also uses certain non-GAAP measures that fall within the meaning of Securities and Exchange Commission Regulation G and Regulation S-K Item 10(e), which may provide users of the financial information with additional meaningful comparison to prior reported results. Non-GAAP measures do not have standardized definitions and are not defined by U.S. GAAP. Therefore, CSX’s non-GAAP measures are unlikely to be comparable to similar measures presented by other companies. The presentation of these non-GAAP measures should not be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP.
Forward-looking Statements
This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, margins, volumes, rates, cost-savings, expenses, taxes, liquidity, capital expenditures, dividends, share repurchases or other financial items, statements of management's plans, strategies and objectives for future operations, and management's expectations as to future performance and operations and the time by which objectives will be achieved, statements concerning proposed new services, and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as “will,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate,” “preliminary” and similar expressions. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. If the company updates any forward-looking statement, no inference should be drawn that the company will make additional updates with respect to that statement or any other forward-looking statements.
Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by any forward-looking statements include, among others: (i) the company's success in implementing its financial and operational initiatives; (ii) changes in domestic or international economic, political or business conditions, including those affecting the transportation industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; (v) the outcome of claims and litigation involving or affecting the company; (vi) natural events such as severe weather conditions or pandemic health crises; and (vii) the inherent uncertainty associated with projecting economic and business conditions.
Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the company's SEC reports, accessible on the SEC's website at www.sec.gov and the company's website at www.csx.com.
Contact:
Matthew Korn, CFA, Investor Relations
904-366-4515
Bryan Tucker, Corporate Communications
855-955-6397
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