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CSX CORP (CSX)·Q4 2024 Earnings Summary

Executive Summary

  • Revenue decreased 4% year-over-year to $3.54B, driven by lower fuel surcharge and coal revenue; GAAP EPS was $0.38 and adjusted EPS was $0.42, with operating margin at 31.3% GAAP and 34.3% adjusted .
  • Total volume rose 1% to 1.58M units, with intermodal volume +4% and merchandise flat; coal revenue fell 20% and fuel surcharge revenue declined sharply year-over-year .
  • Management flagged discrete 2025 headwinds (coal benchmarks, fuel surcharge, and major projects), guiding to low-to-mid single-digit volume growth, a trough in Q1 operating income, and an expected effective tax rate of ~24.5% .
  • Dividend raised 8% to $0.13 per share post-quarter, reinforcing capital return commitment despite near-term earnings pressure; project catalysts include Howard Street Tunnel enabling double-stack on the I-95 corridor and Blue Ridge rebuild benefits beyond 2025 .
  • S&P Global consensus estimates could not be retrieved at time of analysis; as a result, beats/misses vs Street are not quantified and should be rechecked once estimates access is available [GetEstimates error: “Daily Request Limit of 250000 Exceeded”].

What Went Well and What Went Wrong

What Went Well

  • Pricing resilience and service-led growth: combined merchandise and intermodal revenue (ex-fuel) grew for the eighth consecutive quarter; management emphasized “strong, consistent customer service” enabling pricing according to delivered value .
  • Intermodal and merchandise volumes: intermodal volume +4% in Q4; chemicals +6% volume; minerals and forest products up; Net Promoter Score reached an all-time high in Q4 .
  • Efficiency gains and fuel savings: fuel efficiency improved (+2% YoY), contributing to ~$45M in savings in 2024; locomotive fuel price -23% YoY supported lower fuel expense .

Management quotes:

  • “We will remain disciplined in delivering safety, service, and operating efficiency performance… and look forward to delivering on the profitable growth opportunities ahead of us.” — CEO Joe Hinrichs .
  • “Adjusted expenses decreased… the team delivered an eighth consecutive quarter of 3-plus percent growth in combined merchandise and intermodal revenue, excluding fuel.” — CFO Sean Pelkey .
  • “Net Promoter Score reaching an all-time high.” — CCO Kevin Boone .

What Went Wrong

  • Coal and fuel surcharge headwinds: total coal revenue down 20% YoY; fuel surcharge revenue down to $221M from $334M; all-in coal RPU and benchmarks pressured results .
  • Safety and service metrics deteriorated: FRA train accident rate and personal injury frequency increased; dwell worsened 17% YoY; carload and intermodal trip plan performance fell 11% .
  • Margin compression and impairment: operating margin fell to 31.3% (from 35.7% prior-year); a $108M goodwill impairment (Quality Carriers) reduced GAAP earnings by ~$0.04 per share .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$3.68 $3.62 $3.54
Operating Income ($USD Billions)$1.32 $1.35 $1.11
Operating Margin (%)35.7% 37.4% 31.3%
Diluted EPS (GAAP) ($)$0.45 $0.46 $0.38
Diluted EPS (Adjusted) ($)N/AN/A$0.42
Total Volume (M units)1.560 1.590 1.575

Segment breakdown (Q4 2023 vs Q4 2024):

SegmentVol (k units) Q4’23Vol (k units) Q4’24Revenue ($MM) Q4’23Revenue ($MM) Q4’24RPU ($) Q4’23RPU ($) Q4’24
Chemicals161 171 661 708 4,106 4,140
Agricultural & Food120 116 429 415 3,575 3,578
Automotive98 96 314 296 3,204 3,083
Minerals85 88 179 189 2,106 2,148
Forest Products70 72 251 257 3,586 3,569
Metals & Equipment67 63 213 201 3,179 3,190
Fertilizers47 44 135 125 2,872 2,841
Total Merchandise648 650 2,182 2,191 3,367 3,371
Intermodal720 746 552 526 767 705
Coal192 179 620 499 3,229 2,788
Trucking——204 194 ——
Other——122 129 ——
Total1,560 1,575 3,680 3,539 2,359 2,247

KPIs (operations, safety, and cost drivers):

KPIQ4 2023Q4 2024
Train Velocity (mph)18.3 18.3
Dwell (hours)9.6 11.2
On-Time Originations (%)71% 71%
On-Time Arrivals (%)69% 61%
Carload Trip Plan Performance (%)85% 76%
Intermodal Trip Plan Performance (%)95% 85%
Fuel Efficiency (gal per 1,000 GTM)1.00 0.98
Locomotive Fuel Price ($/gal)$3.08 $2.38
Fuel Surcharge Revenue ($MM)$334 $221
Total Coal Tonnage (MM tons)21.7 20.1
Average Employees (estimated)23,183 23,464

Notes:

  • Adjusted figures exclude the Q4 goodwill impairment; see reconciliations .
  • Estimates vs Street: unavailable at time of analysis due to S&P Global access limits; re-verify to assess beat/miss [GetEstimates error].

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Volume GrowthFY 2025N/A (prior Investor Day implied profitable growth trajectory) Low to mid-single-digit growth, merchandise + intermodal-led; Q1 slow start, build through year New qualitative outlook
Operating Income Trajectory1H 2025 / 2H 2025Investor Day mid-to-high single-digit growth framework (multi-year) Q1 operating income trough; YoY growth resuming in 2H 2025; discrete headwinds of ~$300–350M in 2025 context Near-term lowered; back-half improvement
Coal RPUQ1 2025N/ADown ~3% sequentially based on current benchmarks Lowered
Effective Tax RateOngoing (FY 2025)N/A~24.5% expected Set
Project-related PS&O/Network Impact2025N/AHoward Street Tunnel and Blue Ridge rebuild incremental net ~$10M/month through construction; benefits in 2026 Added costs in 2025, benefits post-completion
CapexFY 2025~$2.5B in 2024; hurricane rebuild additional Roughly flat YoY excluding hurricane rebuild; Blue Ridge total cost expected >$400M before insurance Maintained core; added rebuild outlays
DividendPost-Q4$0.12/qtr prior $0.13/qtr (+8%) effective March 14, 2025 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Service & Customer SatisfactionEmphasis on service; resilient response to Baltimore disruptions Best-ever customer NPS; service-led merchandise growth NPS all-time high; service enabling pricing and conversions Improving
Trucking Market & Intermodal PricingTruck rates soft; intermodal volume growth despite pressure Truck market bottoming signs; international intermodal strong Domestic intermodal converting despite tough truck market; potential stabilization and later rate improvement Stabilizing to improving
Coal Benchmarks & MixExport coal price declines; revenue pressure All-in coal RPU down; export +10% tonnage YoY, domestic -12% Coal revenue -20%; Q1 RPU guided -3% seq; mine outages in 1H Headwind near term
Fuel Surcharge / Fuel PriceLower diesel impacting revenue RPU Lower fuel surcharge; fuel efficiency gains Fuel surcharge down YoY; fuel price -23% YoY; efficiency savings continue Headwind to revenue, tailwind to cost
Major Projects (Howard Street, Blue Ridge)—Helene rebuild costs >$200M; planning for Blue Ridge Howard Street reroutes underway; ~$10M/month 2025 impact; Blue Ridge rebuild >$400M expected Costly now, accretive later
Regulatory Environment——STB/FRA seen supportive of tech and safety progress Constructive
Labor & CultureEarly agreements with unions; cost inflation Early 5-year agreements; stabilize headcount; culture initiatives Stable headcount; lower incentive comp in Q4; aim to hold flat in 2025 Stabilizing

Management Commentary

  • CEO: “We will remain disciplined in delivering safety, service, and operating efficiency performance… invest in the strength and capabilities of our network this year… delivering on the profitable growth opportunities ahead of us.”
  • CFO: “Adjusted EPS fell $0.03, including a $0.06 combined impact from hurricanes, net fuel price and lower export coal benchmarks… Q1 operating income will be our trough… return to year-over-year growth in the second half.”
  • COO: “Fuel efficiency… resulted in millions of dollars in savings… we’re extremely proud… turn [Howard Street Tunnel] around from a 3-year project to one that will take 6 to 8 months… benefits much sooner.”
  • CCO: “Net Promoter Score reaching an all-time high… domestic intermodal converting traffic from over the road even in this challenging truck market.”

Q&A Highlights

  • Margin and EBIT trajectory: Near-term margins pressured; management expects operating income growth to resume in 2H 2025, with discrete 2025 headwinds (~$300–350M) offset by efficiency and volume growth .
  • Coal outlook: Sequential RPU down ~3% in Q1; temporary mine outages mainly 1H; potential export opportunity; domestic utility closures later in year .
  • Howard Street/Blue Ridge economics: ~$10M/month 2025 impact; management expects full recovery of ~$100M operating expense within a couple years post-completion via cost savings and growth .
  • Pricing and trucking: Merchandise pricing remains solid; intermodal could see stabilization and gradual rate improvement if truck capacity tightens; conversions continue even in a soft truck market .
  • Tax and labor cost cadence: Effective tax rate ~24.5%; labor cost modeling guidance provided, with lower H1 run rate then ~4.4% wage inflation in H2 .

Estimates Context

  • S&P Global consensus estimates (EPS and revenue) were unavailable at time of analysis due to a data access limit; therefore, we cannot quantify beats/misses vs Street for Q4 2024. Re-run S&P Global estimates to update this section and assess magnitude of revisions once access is restored [GetEstimates error].

Key Takeaways for Investors

  • Q4 was resilient on volume and service but revenue and margins were pressured by lower coal benchmarks and fuel surcharge; adjusted EPS of $0.42 reflects core performance excluding the goodwill impairment .
  • Near-term setup is weak (Q1 trough), but 2H 2025 recovery is expected as discrete headwinds ease and volume growth/efficiency drive leverage; monitor coal benchmarks and intermodal rate trends .
  • Howard Street Tunnel and Blue Ridge rebuild are strategic; 2025 earnings drag should flip to margin/volume tailwinds from 2026 onward as double-stack capability opens I-95 corridor density and reduces outer route miles .
  • Pricing power remains intact in merchandise; continued truck-to-rail conversions and industrial development pipeline support medium-term profitable growth > inflation .
  • Operational KPIs show efficiency gains amid weather disruptions (fuel efficiency +2% YoY), but service metrics (dwell, trip plan performance) deteriorated in Q4; improvement into 2025 is key for narrative .
  • Capital returns remain robust (dividend up 8% to $0.13), balanced with elevated rebuild capex; watch insurance recoveries vs Blue Ridge outlays (> $400M expected) .
  • Actionable: re-check S&P Global estimates; position for potential back-half 2025 inflection; overweight intermodal/channel partners with exposure to East Coast volumes and CSX’s inland port initiatives; monitor coal benchmark stabilization and early signs of truck capacity tightening .