10-QPeriod: Q1 FY2021

CSX CORP Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 21, 2021For Securities:CSX

Summary

CSX Corporation reported its first-quarter 2021 financial results, showing a slight decrease in revenue and net earnings compared to the prior year. Revenue declined by 1% to $2.81 billion, while net earnings fell by 7% to $706 million, resulting in diluted earnings per share of $0.93, down from $1.00 in the first quarter of 2020. This performance reflects ongoing impacts from the COVID-19 pandemic on global supply chains and consumer spending, alongside challenging weather conditions that affected operational efficiency. Despite the revenue dip, the company managed expenses with a 2% increase, leading to a 7% decrease in operating income. CSX continues to focus on operational improvements and has significant liquidity, with approximately $3.0 billion in cash, cash equivalents, and short-term investments. The company also remains committed to returning capital to shareholders through dividends and share repurchases, with $5.3 billion remaining under its repurchase programs.

Financial Highlights

47 data points
Beta

Revenue

$2.81B

Net Income

$706.00M

25.1% Net Margin

EPS (Diluted)

$0.31

Total Assets

$39.69B

Cash & Equivalents

$2.96B

Free Cash Flow

$926.00M

Financial Statements
Beta
Revenue$2.81B
Operating Income$1.10B
Net Income$706.00M
EPS (Basic)$0.31
EPS (Diluted)$0.31
Shares Outstanding (Basic)2.28B
Shares Outstanding (Diluted)2.29B

Key Highlights

  • 1Revenue for Q1 2021 was $2.81 billion, a 1% decrease year-over-year, impacted by lower merchandise volume and fuel recovery, partially offset by intermodal growth and pricing.
  • 2Net earnings decreased by 7% to $706 million, resulting in diluted EPS of $0.93, down from $1.00 in Q1 2020.
  • 3Total operating expenses increased by 2% to $1.71 billion, leading to a 7% decrease in operating income to $1.1 billion.
  • 4The operating ratio worsened to 60.9% from 58.7% in the prior year's quarter, indicating decreased operational efficiency.
  • 5CSX repurchased $551 million of its stock in Q1 2021, continuing its capital return strategy, with $5.3 billion remaining authorized for future repurchases.
  • 6The company ended the quarter with $2.96 billion in cash and cash equivalents, maintaining a strong liquidity position.
  • 7CSX is pursuing the acquisition of Pan Am Systems, Inc., which is currently undergoing regulatory approval.

Frequently Asked Questions

The decrease in revenue and net earnings was primarily attributed to the lingering effects of the COVID-19 pandemic on global supply chains and consumer spending, which led to lower merchandise volumes. Challenging weather conditions in the first quarter of 2021 also negatively impacted operational efficiency and volumes. Additionally, decreases in fuel recovery rates contributed to the revenue decline.

CSX experienced a 2% increase in total expenses, which was managed through a combination of cost-saving initiatives and efficiencies, such as changes to the train plan that reduced crew starts and headcount. However, increases in labor and fringe expenses due to higher incentive compensation and other costs, along with higher equipment and other rents, partially offset these savings.

CSX maintained a strong liquidity position with approximately $3.0 billion in cash, cash equivalents, and short-term investments at the end of the quarter. The company is committed to returning capital to shareholders through dividends and ongoing share repurchase programs, with a significant amount of authorization remaining. Planned capital investments for 2021 are expected to be between $1.7 and $1.8 billion, primarily to sustain core infrastructure.

Yes, CSX has signed a definitive agreement to acquire Pan Am Systems, Inc., which is currently awaiting approval from the Surface Transportation Board. Additionally, CSX entered into an agreement to sell certain interests in three owned line segments to the Commonwealth of Virginia for $525 million, with the first phase of this transaction already closed.