CSX’s Q1 2017 Earnings Preview: Productivity Gains And Top Line Growth To Boost Earnings

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CSX will release its first quarter earnings result on April 19 and conduct a conference call with analysts the next day. [1] We expect the company to report healthy growth in earnings, as a result of top line growth and the company’s productivity improvement initiatives.

CSX reported a modest growth in shipment volumes in Q1 2017, in stark contrast to the previous year which was mostly characterized by volume declines. [2] Steady economic growth has translated into a recovery in shipment volumes across categories, though a strong U.S. Dollar has hampered exports. Improved economic conditions and steady improvements in service levels should translate into core pricing growth for CSX, with higher fuel surcharge revenue further boosting realized prices. In addition, the company’s ongoing productivity improvement initiatives should help boost the company’s bottom line. CSX has maintained its focus on productivity gains, with technology-enabled operational improvements helping prop up its profits. Productivity improvements will certainly be in the spotlight with the appointment of Hunter Harrison as the new CEO of CSX. [3] Mr. Harrison, a railroad industry veteran, has driven substantial productivity improvements in his previous roles, particularly at Canadian Pacific. We look forward to hearing from the new CEO about his plans for CSX. The following tables summarize our expectations from CSX’s Q1 results.

CSX Q1 2017 Earnings Preview

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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 First-Quarter Earnings Release and Earnings Call, CSX News Release []
  2. CSX’s Weekly Carloads Report Week 13, CSX Website []
  3. CSX Names E. Hunter Harrison as Chief Executive Officer, CSX News Release []