Financial Woes Hit CSX as Lower Coal Prices and Fuel Surcharges Impact
Shares of CSX (NASDAQ:CSX) took a plunge after Wednesday’s close as the railway company reported a significant drop in profits, attributed to reduced fuel surcharges, lower coal prices, and a decline in trucking revenue.
Revenue and Earnings Take a Hit
Total revenue for Q4 stood at $3.68B, representing a 1% decline from the previous year. However, while the revenue was below last year’s figures, it surpassed the Street’s estimate by $50M. The decrease in revenue attributed to a fuel surcharge fell to $334M from $406M, and the trucking revenue witnessed a $22M decrease compared to the prior year.
A profit of $0.45 per share managed to exceed expectations by a penny but showed a 4 cents decline from the previous year. Company officials pointed to higher labor costs, inflation, and purchased services as the culprits for the decline.
Financial Snapshot and Future Outlook
As of Dec. 31, CSX reported cash and cash equivalents of $1.35B, down from $1.96B last year. The decline in profits and financials has sparked concern among investors and analysts.
Despite the decline, CSX chief executive Joe Hinrichs expressed confidence, stating, “Our railroad is running well, we have the right team and resources in place, and we look forward to building on our positive momentum with profitable growth over this next year.”
Following the news, CSX shares tumbled by 2.5%, showing the market’s immediate reaction to the disappointing financial report.
