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What's in Store for CSX Corp (CSX) This Earnings Season?

CSX Corporation CSX is scheduled to report fourth-quarter 2020 results on Jan 21, after market close.

The Zacks Consensus Estimate for fourth-quarter earnings has been revised 1% upward to 99 cents per share in the past 60 days. Moreover, it has an impressive earnings history. The company’s earnings outperformed the consensus mark in three of the preceding four quarters (missing the same in one). It has a trailing four-quarter earnings surprise of 2.8%, on average.

Against this backdrop, let’s discuss the factors that are likely to have impacted CSX’s December-quarter performance.

CSX’s overall volumes for the to-be-reported quarter are expected to have increased sequentially owing to gradual recovery from coronavirus woes. The Zacks Consensus Estimate for total volumes suggests 3.8% rise sequentially.

CSX Corporation Price and EPS Surprise

CSX Corporation price-eps-surprise | CSX Corporation Quote

Intermodal volumes are also likely to have driven fourth-quarter performance owing to reopening of operations. The Zacks Consensus Estimate for intermodal volumes indicates 5% increase from the September-end quarter’s reported figure. Notably, Zacks Consensus Estimate for intermodal revenue also inched up 6.1% sequentially.

Coal volumes are also expected to have aided the company’s performance in the fourth quarter, owing to gradual increase in export and domestic coal demand. Further, higher coal volumes are likely to have aided coal revenues in the to-be-reported quarter. The consensus mark for coal revenues suggests 9.7% rise from the number reported in third-quarter 2020.

Despite coronavirus concerns, CSX does not intend to cut back much on capital expenses. This might have hurt its bottom-line performance.

Earnings Whispers

The proven Zacks model predicts an earnings beat for CSX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: CSX has an Earnings ESP of 0.78% as the Most Accurate Estimate is pegged at $1.00, higher than the Zacks Consensus Estimate of 99 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CSX carries a Zacks Rank #3.

Highlights of Q3 Earnings

CSX’s earnings of 96 cents per share surpassed the Zacks Consensus Estimate of 93 cents. However, the bottom line declined 11.1% year over year due to lower revenues. Meanwhile, total revenues of $2,648 million lagged the Zacks Consensus Estimate of $2,704.6 million and fell 11.1% year over year. The downside was caused by coal and merchandise volume declines, thanks to coronavirus.

Other Stocks to Consider

Investors interested in the broader Transportation sector may also consider Canadian Pacific Railway Limited CP, C.H. Robinson Worldwide, Inc. CHRW and Union Pacific Corporation UNP as these stocks also possess the right combination of elements to beat estimates this reporting cycle.

Canadian Pacific has an Earnings ESP of +0.12% and is Zacks #3 Ranked, presently. The company will release fourth-quarter 2020 results on Jan 27.

C.H. Robinson has an Earnings ESP of +1.01% and a Zacks Rank of 3 at present. The company will release fourth-quarter 2020 results on Jan 27.

Union Pacific has an Earnings ESP of +2.28% and is currently a #3 Ranked player. The company will release fourth-quarter 2020 results on Jan 21.

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