CSX Corporation (CSX) reported third-quarter 2026 earnings of 57 cents per share, surpassing the Zacks Consensus Estimate of 52 cents by 9.6%. Earnings increased 29.5% year over year from the prior-year adjusted figure of 44 cents per share, which excluded a goodwill impairment charge.
Total revenues increased 12% year over year to $4.02 billion, beating the Zacks Consensus Estimate of $3.95 billion by 1.7%. Higher fuel surcharge revenues, volume growth and improved pricing across merchandise, intermodal and coal supported the top line. Total volumes increased 5% year over year.
CSX Corporation Price, Consensus and EPS Surprise
CSX Corporation price-consensus-eps-surprise-chart | CSX Corporation Quote
CSX's Merchandise Revenues Gain on Pricing and Volumes
Merchandise revenues increased 11% year over year to $2.45 billion. Merchandise volumes rose 3% year over year, while revenues per unit improved 8% to $3,613. Higher fuel surcharges and favorable contract renewals contributed to revenue growth.
Chemicals revenues increased 13% year over year to $790 million, supported by higher shipments of petcoke, waste, plastics and crude oil. Agricultural and food products revenues also rose 13% year over year to $430 million, benefiting from increased grain and feed ingredient shipments.
Metals and equipment revenues surged 19% year over year to $267 million, driven by higher steel, equipment and aluminum shipments. Forest products revenues advanced 12% year over year to $277 million, while automotive revenues improved 6% despite lower shipments. Fertilizer revenues declined 6% year over year to $118 million due to weaker demand.
CSX Sees Strong Intermodal and Coal Growth
Intermodal revenues increased 20% year over year to $634 million. Segment volumes advanced 7% to 820,000 units, while revenues per unit grew 13% year over year to $773.
Domestic intermodal shipments benefited from customer wins, new service offerings and tightening trucking capacity. Higher fuel prices also supported revenues per unit, partially offsetting a slight decline in international shipments.
Coal revenues increased 10% year over year to $537 million. Volumes improved 2% year over year to 188,000 units, while revenues per unit rose 7% to $2,856. Higher export shipments of metallurgical and thermal coal, supported by production from reopened mines, helped offset softer domestic utility demand.
Trucking revenues increased 10% year over year to $227 million, while other revenues grew 7% to $166 million.
CSX Controls Expenses Despite Higher Fuel Costs
Total operating expenses declined 2% year over year to $2.45 billion. The reduction reflected the absence of a $164 million goodwill impairment charge recorded in the prior-year quarter, along with operating cost savings.
Fuel expenses surged 60.5% year over year to $451 million as locomotive fuel prices increased 67% to $4.24 per gallon. Lower fuel consumption and improved efficiency partially offset the impact of higher prices.
Labor and fringe expenses increased 2% year over year to $834 million, driven by higher incentive compensation and wage inflation. Purchased services and other expenses declined 10% to $657 million, benefiting from efficiency initiatives and lower network disruption-related costs.
Depreciation and amortization expenses fell 3% year over year to $413 million, while equipment and other rents increased 7% to $92 million.
CSX Posts Higher Operating Income and Margins
Operating income increased 44.4% year over year to $1.57 billion. Compared with the prior-year adjusted operating income of $1.25 billion, the increase was 25.5%.
Operating margin expanded to 39.1% from the prior-year adjusted margin of 34.9%, representing an improvement of 420 basis points.
Net earnings increased 51.6% to $1.05 billion from reported net earnings of $694 million a year earlier. Excluding the prior-year impairment, net earnings improved 28.6% from $818 million.
CSX's Safety Improves Despite Service Challenges
The Federal Railroad Administration personal injury frequency index improved 17% to 0.97, while the train accident rate declined 5% to 2.77. Fuel efficiency improved 2% to 0.92 gallons per 1,000 gross ton-miles.
However, average train velocity declined 2% to 18.6 miles per hour, while dwell time increased 12% to 10.6 hours. Carload trip plan performance decreased to 73% from 83%, reflecting continued service challenges.
CSX Generates Strong Cash Flow
Net cash provided by operating activities totaled $4.22 billion during the first nine months of 2026, compared with $3.23 billion in the year-ago period. Free cash flow before dividends increased to $2.65 billion from $1.07 billion.
CSX exited September with cash and cash equivalents of $1.22 billion, compared with $670 million at year-end 2025. Long-term debt stood at $17.1 billion, compared with $18.17 billion at year-end.
The company repurchased $1.06 billion of shares and paid $779 million in dividends during the first nine months.
CSX's 2026 Guidance
For full-year 2026, CSX expects high-single-digit revenue growth. Operating margin expansion is anticipated to exceed 350 basis points. Management expects free cash flow growth of more than 80%, while total capital expenditures are projected to remain below $2.4 billion.
CSX has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q3 Performance of Other Transportation Companies
Delta Air Lines DAL reported third-quarter 2026 earnings (excluding 57 cents from non-recurring items) of $1.72 per share, missing the Zacks Consensus Estimate of $1.80 by 4.44%. Earnings increased year over year despite sharply higher fuel costs and rising non-fuel expenses.
Adjusted revenues climbed 16% year over year to $17.59 billion but missed the consensus estimate of $17.74 billion by 0.9%. Broad demand strength and healthy yields lifted adjusted total revenue per available seat mile, or TRASM, by 15%, while premium and diversified revenue streams continued to expand.
J.B. Hunt Transport Services, Inc. JBHT reported third-quarter 2026 earnings of $1.82 per share, up 3.4% from $1.76 a year ago. The figure beat the Zacks Consensus Estimate of $1.81 by 0.6%.
Operating revenues climbed 20.4% year over year to $3.68 billion and surpassed the consensus mark of $3.56 billion by 3.2%. Stronger pricing, an 8% increase in Intermodal loads and higher brokerage volumes supported growth. However, elevated driver-related expenses, fuel costs and insurance claims pressured profitability.
United Airlines Holdings, Inc. UAL reported third-quarter 2026 adjusted earnings of $2.54 per share, down 8.6% year over year and below the Zacks Consensus Estimate of $2.60 by 2.3%. Higher fuel expenses weighed on profitability despite strong revenue growth.
Operating revenues rose 17.4% to $17.88 billion but missed the consensus mark of $17.91 billion by 0.2%. A 15.9% increase in total revenue per available seat mile or TRASM, supported the top line, driven by strength across premium, loyalty and contracted business revenues.
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CSX Corporation (CSX): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).