CSX’s Q2 2016 Earnings Review: Lower Shipment Volumes And Fuel Surcharge Revenue Negatively Impact Results

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CSX’s earnings per share declined 16% year-over-year in Q2 2016 as a result of a decline in revenue primarily due to lower shipment volumes, particularly coal shipments, and lower fuel surcharge revenue. Weak demand for coal from utilities as a result of soft natural gas prices drove down the company’s coal shipments, and lower oil prices this year translated into lower fuel surcharge revenue. Though CSX’s cost reduction initiatives and lower volume-related operating expenses partially offset the impact of top line headwinds on the operating ratio (operating expenses as a percent of revenue), the net impact was a 210 basis point deterioration in this metric of profitability.

CSX Q2 2016 Earnings 1

CSX Q2 2016 Earnings 2

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Have more questions about CSX? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for CSX

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