CSX’s 2Q16 earnings
CSX Corporation (CSX), a NASDAQ-listed transportation giant, will release its 2Q16 earnings on July 13, 2016, after markets close. The company will hold an earnings conference with securities analysts and institutional investors at 8:30 AM EST on July 14 to discuss the results.
Share price performance
The demand for rail services usually arises from the demand for merchandise hauled by railroads. From this perspective, railroad stocks provide a good insight into the overall health of the economic activities. CSX was in a particular limelight in the second quarter of 2016 for negative reasons, the first being derailments in northeast Washington in May 2016.
In another blow to the Florida-headquartered rail giant, 13 freight cars derailed inside the Howard Street Tunnel, Baltimore, in June 2016. Since its 1Q16 earnings release on April 13, CSX has delivered just 0.7% to investors.
The returns of CSX’s peer group include the following:
- Norfolk Southern (NSC), CSX’s archrival, delivered a return of 0.4%.
- Kansas City Southern (KSU), the smallest Class I railroad, delivered a return of 20.6%.
- Major western US carrier Union Pacific (UNP) delivered a return of 11.2%.
- Canada’s largest railroad, Canadian National Railway (CNI), delivered a return of 4.9%.
- Canada’s second-largest railroad, Canadian Pacific (CP), delivered a return of 2.2%.
- The United States’ largest short-line operator, Genesee & Wyoming (GWR), delivered a return of -10.8%.
Investors interested in railroad stocks can consider the iShares Transportation Average ETF (IYT). Major US railroads make up 23.8% of the portfolio holdings of IYT.
Why investors should read this series
In the words of Frank Lonegro, CSX’s Chief Financial Officer, “We are seeing year-to-date volume declines across most of our markets, reflecting continued low global commodity prices, the strong US dollar, and the transition in the energy markets. For the second quarter, we now expect high-single-digit volume declines, which will negatively impact second quarter earnings.”
In this series, we’ll provide a preview of the CSX’s earnings and business developments. With this preview, investors will be able to compare the company’s actual performance with analyst expectations.
Let’s start with the expectations for CSX’s 2Q16 revenues.