10-QPeriod: Q1 FY2020

CSX CORP Quarterly Report for Q1 Ended Mar 31, 2020

Filed April 23, 2020For Securities:CSX

Summary

CSX Corporation's first quarter 2020 results show a slight decrease in revenue and net earnings compared to the prior year. Revenue declined by 5% to $2.86 billion, while net earnings fell to $770 million, or $1.00 per diluted share, down from $834 million, or $1.02 per diluted share in Q1 2019. Despite the revenue dip, the company improved its operating ratio to 58.7%, indicating better operational efficiency. The company highlighted the impact of the COVID-19 pandemic on its operations, noting disruptions to global manufacturing, supply chains, and consumer spending. CSX has implemented safety protocols to protect employees and maintain service levels. While the full impact of the pandemic is still uncertain, the company maintains a strong liquidity position with significant cash balances and available credit facilities. CSX also continued its commitment to returning capital to shareholders through dividends and share repurchases.

Financial Highlights

46 data points
Beta

Revenue

$2.85B

Net Income

$770.00M

27.0% Net Margin

EPS (Diluted)

$0.33

Total Assets

$38.83B

Cash & Equivalents

$2.00B

Free Cash Flow

$797.00M

Financial Statements
Beta
Revenue$2.85B
Operating Income$1.18B
Net Income$770.00M
EPS (Basic)$0.33
EPS (Diluted)$0.33
Shares Outstanding (Basic)2.32B
Shares Outstanding (Diluted)2.32B

Key Highlights

  • 1Revenue decreased 5% to $2.86 billion in Q1 2020 compared to $3.01 billion in Q1 2019.
  • 2Net earnings decreased 8% to $770 million in Q1 2020 from $834 million in Q1 2019.
  • 3Earnings per diluted share decreased 2% to $1.00 in Q1 2020 from $1.02 in Q1 2019.
  • 4Operating ratio improved by 80 basis points to 58.7% in Q1 2020.
  • 5Expenses decreased 7% to $1.68 billion, driven by efficiency savings and lower fuel costs.
  • 6CSX experienced a significant decline in coal volume (15%) and revenue (25%), attributed to competition from natural gas and lower international demand.
  • 7The company held $1.995 billion in cash and cash equivalents as of March 31, 2020, a substantial increase from $958 million at year-end 2019.
  • 8CSX continued share repurchases, spending $577 million in Q1 2020, and maintained its dividend payout.
  • 9The company acknowledged the developing impact of the COVID-19 pandemic on its operations and demand for services.

Frequently Asked Questions

CSX reported total revenue of $2.855 billion for the first quarter of 2020, a decrease of 5% ($158 million) compared to $3.013 billion in the first quarter of 2019. This decline was primarily driven by significant decreases in coal revenue and unfavorable mix, partially offset by merchandise growth.

CSX successfully reduced its total expenses by 7% ($117 million) to $1.677 billion in the first quarter of 2020 compared to the prior year. Key drivers for this reduction included efficiency savings, lower headcount, reduced overtime, decreased fuel costs, and lower equipment maintenance expenses.

CSX stated that the COVID-19 pandemic has begun impacting its results due to disruptions in global manufacturing, supply chains, and consumer spending. The company is implementing safety measures for employees and customers and adapting its operations. However, the ultimate magnitude of the impact remains uncertain and will depend on the pandemic's duration and its effect on demand for transportation services.

Total assets increased by $577 million to $38.834 billion. Notably, cash and cash equivalents significantly increased to $1.995 billion as of March 31, 2020, up from $958 million at year-end 2019. Long-term debt increased to $16.732 billion from $16.238 billion, partly due to the issuance of $500 million in new notes.