CSX Corporation (CSX 0.08%) is a major American railroad company providing rail-based transportation services.
The company released its Q1 2025 earnings report on April 16, 2025. The report showed GAAP earnings of $0.34 per share, falling short of market expectations of $0.37. GAAP revenues totaled $3.42 billion in Q1 2025, below the anticipated $3.45 billion.
Q1 2025 reflected challenges due to infrastructure projects and tepid demand in certain business segments.
| Metric | Q1 2025 | Q1 Estimate | Q1 2024 | Y/Y Change |
|---|---|---|---|---|
| Revenue (GAAP) | $3.42B | $3.45B | $3.68B | (7.1%) |
| EPS (Non-GAAP) | $0.34 | $0.37 | $0.45 | (24.4%) |
| Operating Income (GAAP) | $1.04B | N/A | $1.34B | (22.4%) |
| Net Income (GAAP) | $646M | N/A | $880M | (26.6%) |
Data source: SEC filings. Estimates collected from FactSet.
Overview of CSX's Business
CSX operates one of the largest freight rail networks in the United States, spanning approximately 20,000 route miles. The company's transportation services in 2024 were divided across four key segments: Merchandise, Intermodal, Coal, and Trucking (Quality Carriers). The company relies heavily on its Merchandise segment, which generated 61% of total revenue in 2024 and covers a wide variety of shipped goods including chemicals, food, and automotive products.
In recent years, CSX has emphasized growth and optimization by investing in infrastructure and expanding its reach through acquisitions. One of the focuses for CSX has been to reduce reliance on traditional coal shipments, which represented 15% of revenue in 2024, diversifying into more stable segments like Intermodal transportation, which accounted for 14% of revenue in 2024. Success in these areas hinges on network efficiency and maintaining competitive pricing.
Recent Quarter Developments
The first quarter saw a decline in the Merchandise segment, which remains crucial to CSX's revenue stream. Revenue from this segment decreased by 2% in Q4 2024, as declines in fuel surcharge and coal revenue offset the effects of higher pricing and volume in merchandise and intermodal segments. In Q4 2024, intermodal transportation showed some gains, with volume up 2% year-over-year, although not enough to counterbalance losses elsewhere. Meanwhile, in Q4 2024, the Coal segment continued to struggle due to reduced domestic and international demand, with revenue declining 27% and volume down 9%.
In Q1 2025, CSX faced significant operational hurdles, partly due to major infrastructure projects that constrained network capacity. The president and CEO, Joe Hinrichs, acknowledged these challenges, highlighting their impact on performance. The Howard Street Tunnel project, while aimed at boosting long-term infrastructure efficiency, has temporarily affected operations in 2025.
Financially, CSX reported GAAP operating income falling to $1.04 billion in Q1 2025, down from $1.34 billion in Q1 2024, and GAAP net income decreased 26.6% to $646 million in Q1 2025.
Despite the soft Q1 2025 GAAP financial performance, CSX remains committed to long-term strategic initiatives.
Looking Ahead
For 2025, CSX expects volume growth in the low to mid-single-digit range, driven by merchandise and intermodal business. However, the emphasis on the completion of ongoing projects indicates a strategic shift towards enhancing its network's capacity and reliability to fuel long-term competitiveness. Unknown market conditions prompt careful analysis as CSX works through current operational constraints.
Investors should monitor CSX's progress with its infrastructure projects and adjustments in business strategy. Although the earnings update underscored operational and financial hurdles, significant efforts are underway to optimize its network and service offerings. These will be critical in supporting growth and improving market position as headwinds lessen.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
