CSX Corporation CSX reported first-quarter 2016 earnings of 37 cents per share, which came in line with the Zacks Consensus Estimate.Revenues of $2,618 million fell short of our estimate of $2,732 million and also declined 14% year over year owing to a substantial drop in coal volumes. First-quarter operating income fell 16% year over year to $704 million. Meanwhile, operating ratio (defined as operating expenses as a percentage of revenues) was 73.1% compared with 72.2% in the year-ago quarter. Operating expenses contracted 12% year over year to $1,914 million.Segmental PerformanceMerchandise revenues fell 4% year over year to $1,734 million in the quarter owing to a 3% volume contraction. This was largely a result of a 10% revenue decline at the Metals and Agricultural segments.Coal revenues deteriorated 37% year over year to $399 million on a 31% reduction in volumes which was a result of soft global coal demand and declining fuel prices.Intermodal revenues dropped 2% year over year to $405 million. On a year-over-year basis, volumes increased 4% while revenue per user declined 6%.Other revenues grossed $80 million, down 52% year over year.LiquidityThe company exited the first quarter of 2016 with cash and cash equivalents of $1,106 million compared with $1,438 million at the end of 2015. Long-term debts totaled $10,516 million compared with $10,515 million at the end of 2015. At the end of the first quarter of 2016, net cash from operating activities stood at $754 million versus $690 million in the same period last year. Free cash flow at the end of first-quarter 2016 was $329 million against $92 million in the prior-year quarter.Our TakeWe believe that declining oil prices have compelled most power plants to substitute coal with cheaper natural gas. Moreover, weaker foreign exchange rates against a stronger U.S. dollar may continue to hurt coal exports for CSX.In addition, regulatory and competitive pressure from railroad operators like Kansas City Southern KSU, Norfolk Southern Corporation NSC and Canadian National Railway Company CNI may further hurt profits.CSX currently carries a Zacks Rank #4 (Sell).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KANSAS CITY SOU (KSU): Free Stock Analysis Report CSX CORP (CSX): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research