Earnings Results: • Revenue of just under $3.7 billion, 1% lower than a year ago and flat compared to last quarter • Operating income was 8% lower than last year but up 3% sequentially • Earnings per share declined by 4% versus last year, but grew by 2% compared to the previous quarter • Operating margin reached 36.8%, a 90 basis point improvement compared to Q4
Future Guidance: • Expect total volume and total revenue growth in the low to mid-single-digit range for full year 2024 • Goal is to consistently grow margins over time • No change to CapEx forecast of $2.5 billion • Balanced opportunistic approach to capital returns remains in place
The Q1 2024 earnings call for CSX Corporation highlighted solid results that were in line with expectations, despite challenges such as severe weather and the Francis Scott Key Bridge collapse in Baltimore. The company saw 3% total volume growth, with strong support from the intermodal business which grew at 7%. While revenue and earnings were lower year-over-year, they showed sequential improvements from Q4.
The company remains focused on providing strong customer service while controlling costs and running the network more efficiently. Efforts are being made to elevate safety culture and proactively identify risks. CSX is working to mitigate the impact of the Baltimore bridge collapse and has diverted some export coal volumes to other outlets. The estimated net revenue impact is $25-30 million per month.
Underlying demand remains solid across many markets, and CSX sees opportunities from contract renewals, truck conversions, and the ramp-up of industrial development projects. The pipeline for these projects is diverse and implies meaningful acceleration in activity going forward. Intermodal saw very strong growth, especially in the international business, and CSX remains optimistic about domestic intermodal as truck capacity normalizes.
Overall, CSX is confident in its ability to deliver strong incremental performance in the second half of the year. The company is focused on execution, prioritizing customers, and achieving good results.
Notable Quotes: • “CSX had a solid start 2024 that was in line with our expectations.” - Joe Hinrichs, President and CEO • “Communication and collaboration between sales and marketing and operations is a key differentiator for CSX.” - Kevin Boone, EVP and CCO • “We’re not distracted by what’s going on and certainly not not getting distracted by it. We’re focused on what we can do, and you saw in the quarter sequential improvement across the Board, and we talked about our confidence in to be able to continue to deliver that.” - Joe Hinrichs