CSX Corp Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
The CSX Corp Q3 2025 Earnings Call discussed the company's financial results, operational performance, and strategic initiatives, with a focus on growth opportunities, cost management, and shareholder value. Key themes included network improvements, market conditions, and capital allocation strategies.
Key Financial Results:
Third quarter reported operating income was $1.1 billion and earnings per share was $0.37.
These figures include $164 million and $0.07 per share from impairment of the remaining goodwill related to Quality Carriers.
Adjusted expenses increased by 3%.
Revenue was lower by about $30 million, or 1%.
Business Segment Results:
Minerals volume and revenue were up 8% and 12%, respectively.
Fertilizer volume rebounded, driving 7% growth.
Metals and equipment volume was up 5%.
Automotive production drove 1% higher volume.
Forest product and chemical markets volume was down 7%.
Ag and food volume was down 7%.
Coal revenue declined 11% for the quarter on 3% lower total volume.
Intermodal revenue was up 4% on a 5% increase in volume.
Capital Allocation:
Property additions are higher year-to-date, including $440 million of spending towards the rebuild project on our Blue Ridge subdivision.
Spending to rebuild the Blue Ridge is now expected to exceed $500 million before insurance recoveries.
Year-to-date free cash flow is $1.1 billion, which includes over $850 million of cash outflows for Blue Ridge and previously postponed tax payments.
CSX remains committed to shareholder distributions and has returned over $2 billion year-to-date.
Full year CapEx guidance of $2.5 billion, excluding the Blue Ridge.
Industry Trends and Dynamics:
Customers face uncertainty and headwinds from shifting trade policies, weak global commodity prices, unsupportive interest rates, and a persistently soft trucking market.
Broader market softness and tariffs continue to impact our forest product and chemical markets.
Power demand remains supportive, held by higher natural gas prices.
Soft trucking market and muted pricing impacted intermodal.
Competitive Landscape:
Starting in the second quarter of 2026, CSX will begin to capitalize on double-stack clearance through Baltimore that will expand intermodal service offerings into the Northeast region.
CSX is well-positioned to take advantage of customer response to consolidation in the industry.
CSX wants to make sure that they have a chance to present their case in terms of what they need to be competitive going forward.
Macroeconomic Environment:
Underlying economy is mixed.
Tariff impacts and general consumer demand remained watch items.
Growth Opportunities and Strategies:
Customers will see benefits from reduced out-of-route miles that will improve on our best-in-class service levels.
Capitalize on double-stack clearance through Baltimore that will expand intermodal service offerings into the Northeast region starting in the second quarter of 2026.
Working closely with numerous partners to help accelerate the buildout of industrial capacity on our network, and our commercial team is actively developing new solutions that will help us expand our reach and gain share.
Pursue strategic opportunities that can create compelling value for our shareholders.
Working with other railroads to take trucks off the road.
Actively developing new solutions that will help expand reach and gain share.
Financial Guidance and Outlook:
Still expect to deliver volume growth for the full year.
Expect fourth quarter results to reflect the strong operating performance and cost efficiencies that have been driven through the year.
Expect to continue demonstrated long-term track record of powerful cash generation, combined with a strong investment grade credit rating that enables value creation through the opportunistic use of share repurchases, while also annually reviewing the dividend with steady increases for over 20 years.
Year-over-year headwinds ease into the fourth quarter, and strong operational execution and cost control provide a positive setup for improved results.
Operational Performance:
One of the strongest operational performances in recent years.
Fastest quarter for train velocity since early 2021.
Dwell time hit its the lowest point since mid-2023, and average daily cars online were the lowest since 2020.
Intermodal TPC rose to 93% from 90%, and carload TPC climbed to 83% from 75%.
Reduced train miles and optimized horsepower utilization.
Howard Street Tunnel and the Blue Ridge subdivision projects are complete.
