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Q4 2024 CSX Corp Earnings Call

In This Article:

Participants

Matthew Korn; Head of Investor Relations; CSX Corp

Joseph Hinrichs; President, Chief Executive Officer, Director; CSX Corp

Michael Cory; Chief Operating Officer, Executive Vice President; CSX Corp

Kevin Boone; Executive Vice President of Sales and Marketing; CSX Corp

Sean Pelkey; Chief Financial Officer, Executive Vice President; CSX Corp

Tom Wadewitz; Analyst; UBS Investment Bank

Scott Group; Analyst; Wolfe Research

Chris Wetherbee; Analyst; Wells Fargo

Ari Rosa; Analyst; Citi

Brandon Oglenski; Analyst; Barclays

Brian Patrick Ossenbeck; Analyst; JPMorgan Chase & Co

Jonathan B. Chappell; Analyst; Evercore ISI Institutional Equities

Ken Hoexter; Analyst; Bank of America

David Vernon; Analyst; Sanford Bernstein

Bascome Majors; Analyst; Susquehanna Financial

Ravi Shanker; Analyst; Morgan Stanley

Jordan Alliger; Analyst; Goldman Sachs

Walter Spracklin; Analyst; RBC Capital Markets

Daniel Imbro; Analyst; Stephens

Jeffrey Kauffman; Analyst; Vertical Research

Presentation

Operator

Ladies and gentlemen, thank you for standing by. My name is Abby and I'll be your conference operator today.
(Operator Instructions)
Thank you. And I would now like to turn the conference over to Matthew Corn, Head of Investor relations and strategy. You may begin.

Matthew Korn

Thank you Abby, Hello, everyone, and good afternoon. Welcome to our fourth quarter earnings call. Joining me on the call today are Joe Hinrichs, President and Chief Executive Officer; Mike Cory, Executive Vice President and Chief Operating Officer; Kevin Boone, Executive Vice President and Chief Commercial Officer; and Sean Pelkey, Executive Vice President and Chief Financial Officer.
In the presentation accompanying this call, which is available on our website, you will find slides with our forward-looking disclosures and our non-GAAP disclosures for your review.
With that, it is now my pleasure to introduce Mr. Joe Hinrichs.

Joseph Hinrichs

All right. Thank you, Matthew, and hello, everyone. Thank you for joining our fourth quarter call. As we look back and review 2024, we see that our railroad faced a significant number of challenges during the year, including weaker commodity prices, a bridge collapse and multiple hurricanes. We had another year where U.S.
industrial production was effectively flat, reflecting mixed end markets across our customer base. There are also some labor disruptions across North American supply chain, which added economic uncertainty. But it's so impressive that through all of this, our ONE CSX team continued working together to improve our overall business. We have been resilient adapting to changing markets and operating conditions while remaining focused on our commitment to customer service.
Last year, it was different than we planned, but we are proud of what we achieved and how we achieved it. We are confident because we know that our momentum continues to build, and we are ready for the important year ahead of us in 2025.
Now as shown on the first slide, we achieved a lot over 2024. CSX achieved 2% volume growth for the year, outpacing the industrial economy yet again, we accomplished this even with a number of constraints on our coal franchise, including the collapse of Francis Scott Key Bridge in Baltimore. Our leading merchandise business delivered 3% revenue growth even after absorbing the effects of much lower fuel surcharge, soft metals markets and the hurricane disruptions.
We delivered strong, consistent customer service and our customers have responded.
You heard this for yourselves at our recent Investor Day, and you can see it in our financial results as we are able to price according to the value we are delivering. Operationally, we worked across our network to reduce waste, unlock capacity and improve responsiveness.
We took more steps in building a successful culture that can deliver more sustainable, efficient performance and drive more positive momentum for the business. We also led the rail industry in reaching early agreements with our labor unions on our 5-year contracts, working together to value our employees, avoid the prolonged labor battles of the past and provide certainty for our customers.
Now we can review some of the results of the fourth quarter. Slide 2 highlights key metrics for our fourth quarter compared to last year, as we expected, our underlying operations performed well, but we did see the impact of substantially lower coal and diesel prices.
Hurricane effects also laid on revenues and expenses for the quarter, as we noted in our October call. Total volume grew by 1% versus last year in the quarter. The largest contributor was growth in intermodal volume, which gained 4%. Quarterly revenue declined by 4% and largely due to lower global coal prices and a decline in fuel surcharge.
Earnings per share declined 7% on an adjusted basis, excluding the effects of the goodwill impairment this quarter. Overall, we executed well through a difficult period. However, we are not satisfied with these results. We have a clear vision of what we want to achieve at CSX, as we shared with you at our recent Investor Day, and we are committed to delivering on that vision for the benefit of our customers, our employees and our shareholders.
Now I'll turn the call over to Mike to discuss our operational performance.