Stock under pressure: CSX Corporation (NASDAQ: CSX)

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CSX Corporation (NASDAQ: CSX) stock fell over 0.7% on January 17th, 2020 (as of 11:03 am GMT-5; Source: Google finance) after the company posted mixed results for the fourth quarter of FY 19. The company has reported the fourth quarter 2019 net earnings of $771 million compared to $843 million in the same period last year. Domestic coal volume fell by 14% due to lower shipments of utility coal as a result of continued competition from natural gas. The export coal also declined by 20% due to lower international shipments of both thermal and metallurgical coal as global benchmark prices declined. However, the operating performance continued to improve in the fourth quarter 2019 with train velocity increasing 12% and car dwell decreasing 9%, both to all-time record levels.

CSX in the fourth quarter of FY 19 has reported the adjusted earnings per share of 99 cents, beating the analysts’ estimates for the adjusted earnings per share of 97 cents. The company had reported 8 percent fall in the adjusted revenue to $2.98 billion in the fourth quarter of FY 19, missing the analysts’ estimates for revenue of $2.92 billion. The decline in revenue is due to lower volumes and negative mix from coal market headwinds. Expenses declined 9 percent year over year to $1.73 billion, on the back of continued efficiency gains and volume-related savings. Operating income fell 8 percent to $1.15 billion compared to the same period last year.

Moreover, the company’s expenses decreased 9% to $1.7 billion, in fourth quarter 2019 when compared to fourth quarter 2018 mainly due to the efficiency gains and volume savings, partially offset by inflation. Depreciation expense declined by $1 million as additional expense of $10 million resulting from a 2019 depreciation study was more than offset by other items, none of which were individually significant. Fuel expense decreased $37 million primarily due to a 7% price decrease, lower volume and cost savings from fuel efficiency initiatives. Equipment and Other Rents expense rose $8 million mainly due to several non-significant items, including inflation, partially offset by volume savings

For the full year 2020, the company expects revenue to be flat to down 2%. The company expects an operating ratio to be of 59%. The capital expenditures are expected to be in the range of $1.6 billion to $1.7 billion for the full year. The company continues to return capital to shareholders in 2020.

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