CSX Corporation (NASDAQ: CSX), reported mixed financial results for the fourth quarter of 2025, as revenue and earnings showed year-over-year declines amid a subdued industrial demand environment, but management expressed cautious optimism for modest growth in 2026.
For the quarter ended Dec. 31, CSX posted net earnings of $720 million, or $0.39 per share, down from $733 million, or $0.38 per share, in the year-ago period. Revenue totaled $3.51 billion, a 1 % decline from the prior year, reflecting weaker merchandise volumes and lower export coal revenue that offset gains in intermodal pricing and volume. Operating income was $1.11 billion, roughly flat with the prior year on a GAAP basis, while operating margin expanded slightly to 31.6 %.
Results included approximately $50 million in expenses tied to severance and technology rationalization initiatives, which weighed on profitability and reduced reported earnings per share by about $0.02. Excluding these and other non-recurring items, results were more in line with analyst expectations.
Market Reaction and Analyst Views
CSX shares fluctuated in aftermarket trading as investors digested the results. Despite a slight revenue shortfall versus consensus forecasts and ongoing demand softness, adjusted earnings narrowly exceeded Wall Street’s EPS forecast, highlighting cost-management progress amid headwinds.
Analysts said the earnings performance reflected persistent weakness in industrial freight demand, particularly in coal and certain merchandise categories, which has pressured top-line growth across the U.S. rail sector. Broader economic indicators, including manufacturing activity and energy prices, remain tepid, limiting revenue drivers for freight carriers.
Operational Trends and Strategic Initiatives
CSX’s operational metrics showed mixed signals. Total volume was modestly higher year-over-year, driven principally by intermodal growth, which continues to benefit from sustained demand for containerized freight. However, weaker export coal pricing and soft industrial shipments contributed to lower revenue per unit and dampened overall revenue performance.
CSX President and Chief Executive Officer, Steve Angel, said in the earnings release that the company’s results “reflect the subdued industrial demand environment and actions taken to adjust our cost structure.” Angel added that CSX’s operational foundation positions the company to pursue improved financial performance in 2026 through continued focus on productivity, cost control and disciplined capital allocation. CSX completed a series of major infrastructure projects that management said should support improved service reliability and network capacity in 2026.
Among operational improvements highlighted were enhancements to key network links and infrastructure repairs that contributed to higher average train speeds and improved on-time delivery metrics in the quarter. These investments are intended to bolster CSX’s competitive position in intermodal markets and prepare the network for anticipated demand growth.
Full-Year 2025 Results
For the full year, CSX reported revenue of $14.09 billion and GAAP operating income of $4.52 billion. On an adjusted basis—excluding a $164 million goodwill impairment recognized in the third quarter—operating income was $4.69 billion, with an adjusted operating margin of 33.2 %. Full-year EPS was $1.54, or $1.61 on an adjusted basis.
Guidance and Outlook
Looking ahead, management projected low single-digit revenue growth for 2026, reflecting expectations of modest economic expansion amid ongoing uncertainty in key freight markets. CSX withdrew longer-term targets previously outlined for 2027, signaling caution given the current macroeconomic outlook. Angel emphasized a priority on disciplined capital allocation and productivity improvements to support shareholder returns and operational efficiency.
CSX also said capital expenditures for 2026 are expected to remain disciplined, focused on high-return projects, while the company continues to explore strategic opportunities to enhance its service offerings. Despite the lack of near-term catalysts in broader industrial markets, leadership stressed confidence in the railroad’s network strength and intermodal growth prospects.
Reasons to Pass on CSX:
- Revenue Declines: Q4 down 1% YoY to $3.51B; full-year $14.09B amid weak demand.
- Earnings Drop: Q4 net $720M ($0.39/share) vs. $733M prior year; missed estimates.
- Demand Weakness: Subdued industrial freight, coal, merchandise; tepid economy.
- One-Time Costs: $50M severance/tech hit EPS by $0.02; $164M impairment.
- Cautious Outlook: Low single-digit 2026 growth; 2027 targets withdrawn.
- Sector Headwinds: U.S. rail pressured by soft volumes, no quick rebound.
