CSX (CSX) Q2 2024 earnings summary

Executive summary

• Revenue was flat year-over-year at $3.7 billion for Q2 2024, with a 2% increase in total volume and net earnings of $963 million, or $0.49 per diluted share, flat year-over-year but up 9% sequentially.

• Operating income was $1.45 billion, down 1% year-over-year but up 8% sequentially, and operating margin improved 280 basis points sequentially to 39.1%.

• Intermodal volume grew 5% year-over-year, with international business driving growth; merchandise revenue rose 5% on 1% volume growth, led by chemicals and automotive.

• Coal revenue declined 12% due to lower benchmark rates and the Baltimore Key Bridge collapse, with export coal volume up but domestic coal down.

• Safety initiatives and a three-year leadership program contributed to improved personal injury and train accident rates.

Financial highlights

• Operating income was $1.45 billion, down 1% year-over-year; operating margin was 39.1%, down 50 basis points year-over-year but up 280 basis points sequentially.

• Free cash flow before dividends for the first half was $1.15 billion, down from $1.53 billion in the prior year.

• Shareholder distributions reached $1.93 billion year-to-date, including $1.15 billion in buybacks and $780 million in dividends.

• Total expenses increased 1% year-over-year, driven by higher labor, inflation, and headcount.

• Net cash provided by operating activities for the first six months was $2.17 billion, down $300 million year-over-year, mainly due to payment of previously postponed federal taxes.

Outlook and guidance

• Expects low to mid-single-digit total volume and revenue growth in the second half of 2024, with meaningful year-over-year operating margin expansion.

• CapEx forecast remains at approximately $2.5 billion for the year, focused on safety, capacity, and technology.

• Profitability to be supported by solid pricing, efficiency improvements, and lower cost inflation.

• Macro environment is more uncertain, but growth expected in chemicals, forest products, ag and food, and minerals.