CSX Corp (NASDAQ:CSX) stock rose 4.68% (As on January 23, 11:32:24 AM UTC-4, Source: Google Finance) after the company reported fourth quarter earnings that exceeded analyst expectations, as investors responded positively to the railroad operator’s performance despite a challenging industrial environment. Overall, total volume was up 1% in the quarter, but revenue was down as negative mix and weaker export coal prices led to a 2% decline in total revenue per unit. For merchandise franchise, where volume and revenue were both down 2%, continues to face market-driven headwinds. Revenue per unit was modestly higher and was also affected by mix as growth was strongest in low RPU areas such as minerals and fertilizers. The company continues to see softness in chemicals and forest products, where volume was down 6% and 11%, respectively. The industrial chemicals market remains weak, and many of the customers are carefully controlling freight spend as they manage through inflation and tariff pressures. In forest products, the company continues to see the effects of plant closures, particularly with pulp and container board, that occurred up until the start of the fourth quarter. Despite these headwinds, the company anticipates benefits from new facilities ramping up in 2026. Automotive volume was down 5% year-over-year.

CSX in the fourth quarter of FY25 has reported the adjusted earnings per share of $0.42, beating the analysts’ estimates for the adjusted earnings per share of $0.41. The company had reported the adjusted revenue decline of 1 percent to $3.51 billion in the fourth quarter of FY25, missing the analysts’ estimates for revenue of $3.55 billion. This is due to the effects of lower merchandise volume and reduced export coal revenue offset higher pricing in merchandise and intermodal, an increase in intermodal volume, and higher fuel surcharge revenue. The quarterly results included approximately $50 million in expenses related to severance and technology rationalization. CSX’s operating income was $1.11 billion for the quarter, resulting in an operating margin of 31.6%. This compares to adjusted operating income of $1.21 billion and adjusted operating margin of 34.3% in the same quarter last year. The company noted that lower merchandise volume and reduced export coal revenue offset higher pricing in merchandise and intermodal segments, an increase in intermodal volume, and higher fuel surcharge revenue during the quarter.

Looking ahead, CSX expects low single-digit revenue growth for 2026, with a targeted operating margin expansion of 200-300 basis points. Capital expenditures are planned to be below $2.4 billion, and the company anticipates at least 50% growth in free cash flow compared to 2025.