CSX Corporation (NASDAQ:CSX) stock rose 0.26% (As on October 20, 11:24:24 AM UTC-4, Source: Google Finance) after the company missed Wall Street estimates for third-quarter profit, as a decline in intermodal freight volumes more than offset pricing gains. Inflationary pressures and higher borrowing costs have reduced consumer demand for goods, at a time when companies are still destocking inventories built up during the pandemic. This has driven down freight volume hauled by rail, particularly in the intermodal segment, which involves shipping goods via two or more modes of transportation. In addition to weak freight volumes, normalizing export coal benchmark prices from last year’s record highs also hit the railroad operator’s revenue for the quarter even as volumes grew year-on-year.

CSX in the third quarter of FY 23 has reported the adjusted earnings per share of 42 cents, missing the analysts’ estimates for the adjusted earnings per share of 43 cents. The company had reported 8 percent fall in the adjusted revenue to $3.57 billion in the third quarter of FY 23, beating the analysts’ estimates for revenue of $3.55 billion, according to LSEG data. CSX’s operating ratio, a key profitability metric for railroads, was 63.8% in the reported quarter, up from 59.5% a year ago. Operating income of $1.3 billion decreased 18% compared to the same period in 2022. This includes negative impacts of approximately $350 million related to net fuel, storage revenue, and coal prices, partially offset by the favorable impact of $42 million due to out-of-period labor and fringe expenses incurred in the prior year.  Net earnings of $846 million, compared to $1.11 billion, in the same period last year. CSX ended the quarter with $1.36 billion in cash and equivalents, down by $598 million from last year.

Additionally, the company has approved a $0.11 per share quarterly dividend on the Company’s common stock. The dividend is payable on December 15, 2023, to shareholders of record at the close of business on November 30, 2023.

For the fourth quarter, strong Midwestern harvest to benefit Ag and Food performance and there is stable demand across automotive, minerals, metals. There is continued strength in export coal volume in both metallurgical and thermal markets. New mine on network expected to ramp up in late 2023. Domestic coal volumes easing as peak seasonal demand fades against stable utility stockpiles Sequential pricing improvement driven by higher global met indices. International intermodal volumes remaining soft as retailers see uncertain consumer demand.