CSX’s Q4 2016 Earnings Preview: Recovery In Shipment Volumes And Productivity Improvement Initiatives To Boost Results

January 13th, 2017 by Trefis Team
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CSX will release its Q4 earnings results on Tuesday, January 17 and conduct a conference call with analysts the next day. [1] We expect the company to report a slight year-over-year improvement in its EPS as shipment volumes continue to stabilize and the impact of the company’s productivity improvement initiatives help boost the company’s bottom line. After several quarters of reporting declines in shipment volumes lead by sharp declines in coal shipments, CSX’s Q4 2016 shipments remained largely stable, with coal and coke shipments registering a 6% year-over-year increase. [2] Rising natural gas prices have driven up the demand for coal from utilities, with benchmark natural gas prices expected to average $3.55 per MMBTU in 2017, around 41% higher than in 2016. [3] In addition, a recovery in oil prices over the course of Q4 2016 and consequently, diesel prices, will help prop up the company’s fuel surcharge revenue and thus, its overall revenue. Lastly, the company’s ongoing productivity improvement initiatives will help boost the company’s earnings in Q4. Improving U.S. economic conditions and a recovery in coal shipments are likely to boost the company’s top line over the course of 2017, reversing the trend of declining revenue over much of 2016. The following tables summarize our expectations for Q4 2016.

CSX Q4 2016 Pre-Earnings 1

CSX Q4 2016 Pre-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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Notes:
  1. CSX Corporation Announces Dates For Earnings Release and Fourth-Quarter Earnings Call, CSX News Release [↩]
  2. CSX’s Weekly Carloads Report Week 52, CSX Website [↩]
  3. Short Term Energy Outlook, EIA [↩]