What is driving CSX Corporation (NASDAQ: CSX) stock

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CSX Corporation (NASDAQ: CSX) stock rose over 3.8% on 23rd April, 2020 (as of 11:24 am GMT-4 ; Source: Google finance) after the company posted mixed results for the first quarter of FY 20.

CSX continues to lead U.S. Class I railroads in fuel efficiency, had operated at one gallon of fuel per 1,000 gross ton miles. The company’s fuel efficiency initiatives from the last several years have reduced annual diesel consumption by approximately 60 million gallons. The company has posted the Fuel expense of $41 million favorable, which is an 18% improvement year-over-year, due to a 12% decrease in the per gallon price as well as significant efficiency improvements and lower volume. The plant performance was the best, it has ever been with 84% of merchandise carloads and 98% of intermodal containers currently meeting their hourly trip plans in April so far. CSX had nearly $2.5 billion of cash and short-term investments at the end of March. In the first quarter, the company had generated free cash flow before dividends of $812 million, down slightly, driven by higher capital expenditures and lower proceeds from property dispositions.

CSX in the first quarter of FY 20 has reported the adjusted earnings per share of $1, beating the analysts’ estimates for the adjusted earnings per share of 92 cents, according to the Zacks Consensus Estimate. The company had reported 5 percent decline in the adjusted revenue to $2.86 billion in the first quarter of FY 20. Merchandise revenue rose 3% on back of 2% higher volumes as broad-based volume growth across markets was partially offset by fall in automotive and fertilizers. Intermodal revenue had fallen 1% on flat volumes, as domestic revenue and volume growth was more than offset by declines in the international business. Coal revenues fell by 25% on 15% lower volumes. Both the domestic and export markets are negatively affected by natural gas prices, weak export demand and benchmark prices. Other revenue had fallen by 40% representing a 2% headwind to total revenue, driven by lapping a favorable customer contract settlement last year and lower demurrage and intermodal storage revenues.

Moreover, CSX operating income had fallen 3% year-over-year, while the company posted the first quarter operating ratio of 58.7%, which represents an improvement of 80 basis point.

In the first quarter of 2020, the capital investment had risen slightly year-over-year. The company continues to invest in the core track, bridge and signal infrastructure and the company continues to prioritize investments that provide safe and reliable train operations.

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