Revenue totaled $3.48 billion for the quarter, an increase of 2% year-over-year, driven by higher merchandise pricing, intermodal volume growth, and higher fuel surcharge revenue, which were partially offset by a decrease in export coal revenue. Net earnings reached $807 million, resulting in diluted earnings per share of $0.43, a 26% increase compared to $0.34 in the first quarter of 2025. This strong profitability was significantly aided by effective cost management that drove a 6% reduction in total operating expenses, allowing the quarterly operating margin to expand to 36.0%.
Note: CSX Corporation's FY'25 ended on December 31, 2025. Q1 FY'26 ended on March 31, 2026.
In February 2026, CSX Corporation signed a $670 million agreement with Wabtec Corporation to upgrade its locomotive fleet. The multi-year deal includes the acquisition of 100 new Evolution Series locomotives, the modernization of 50 legacy locomotives to convert them from DC to AC traction, and the integration of advanced digital solutions like Trip Optimizer. This strategic fleet modernization initiative is designed to improve fuel efficiency, enhance tractive effort, and strengthen overall network reliability as part of the company's long-term operational productivity push.
Below are key drivers of CSX Corporation's value that present opportunities for upside or downside to the current Trefis price estimate:
For additional details, select a division from the interactive Trefis split for CSX Corporation at the top of the page.
CSX Corporation operates a premier rail transportation network covering approximately 20,000 miles across the eastern United States and parts of Canada. The company provides traditional rail carload services for diverse merchandise and coal, intermodal container transport, and rail-to-truck transload solutions, generating revenue based on volume, distance, and fuel surcharges.
The merchandise freight segment serves as the most valuable component of CSX's portfolio because it provides a highly stable, diversified volume across industrial and agricultural markets with substantial pricing power.
The company's vast rail network connects major metropolitan areas where nearly two-thirds of the United States population resides. Replicating this extensive right-of-way infrastructure is virtually impossible due to severe regulatory hurdles and immense capital costs, securing an unbreakable competitive moat.
Through its optimized operating model and automated network scheduling, CSX maintains strong control over its structural costs. High fixed-cost leverage ensures that even minor incremental increases in freight volumes translate directly into substantial operating margin expansion and higher free cash flow.
Global supply chains are increasingly prioritizing cost-efficient and environmentally sustainable transportation alternatives to long-haul trucking. CSX's recent infrastructure completions, including the Howard Street Tunnel double-stack project and the upgraded Southeast Mexico Express service, place the railroad in an ideal position to capture highway freight share.
CSX is aggressively executing a corporate efficiency strategy focused on rigorous cost discipline and advanced fleet upgrades. By investing hundreds of millions to modernize its locomotives and integrating predictive analytics, the company is systematically reducing fuel consumption and enhancing network velocity.
