What To Expect From CSX Corporation’s Q1 Results?

by Trefis Team
CSX Corporation
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CSX Corporation (NYSE: CSX)  is set to release its Q1 financial performance on April 16. This note details Trefis’ forecasts for CSX Corporation, as well as some of the key trends we will be watching when the company reports earnings.

What To Expect From CSX In Q1

  • Expect revenues to be a little over $3 billion, reflecting 5% growth year-over-year, but down 4% sequentially, due to expected rationalization of intermodal lanes.
  • EPS will likely be $0.95 per share, marking a 21% growth year-over-year.

What Trends Will Drive The Company’s Performance?

  • Expect merchandise freight to drive the Q1 growth, led by higher industrial and construction related shipments.
  • The growth will be led by gains in both volume and average revenue per carload.
  • The U.S. construction sector is forecast to grow in mid-single-digits over the next three years.
  • This should result in higher shipments of metals, construction products, plastics, and industrial chemicals.
  • Intermodal growth will likely be muted, as the company focuses on rationalization of intermodal lanes.
  • Coal is unlikely to see any significant growth, as utility coal could continue to decline.
  • The decline in utility coal demand can largely be attributed to the trends in natural gas prices.
  • The benchmark Henry Hub natural gas price is currently trading under $3 levels, falling from the highs of $4.50 in late 2018.
  • With gas prices being more attractive, the dependency on coal as an energy source continues to come down.
  • EIA estimates 603 million short tons (mst) coal consumption in 2019, which will be the lowest coal consumption over the past few decades.
  • Coal exports have been trending higher in the recent quarters, but it may see a slight decline in 2019, thereby impacting the overall volume.

You can view our interactive dashboard analysis on How Is CSX Corporation Likely To Have Fared In Q1? for more details on the expected performance of the company. In addition, you can see more of our data for industrial companies here.

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