CSX’s third quarter results were shaped by significant operational improvements and the completion of major infrastructure projects. Management credited the railroad’s fastest train velocity since 2021 and improved asset utilization as key contributors to the quarter’s positive momentum. CEO Steve Angel highlighted, “The railroad is running well, and we have a strong foundation to drive further improvements.” The completion of the Howard Street Tunnel and Blue Ridge Subdivision projects enabled greater capacity and fluidity across the network, despite ongoing challenges from mixed business conditions and market uncertainty.
Is now the time to buy CSX? Find out in our full research report (it’s free for active Edge members).
CSX (CSX) Q3 CY2025 Highlights:
- Revenue: $3.59 billion vs analyst estimates of $3.57 billion (flat year on year, in line)
- Adjusted EPS: $0.44 vs analyst estimates of $0.42 (3.8% beat)
- Adjusted EBITDA: $1.68 billion vs analyst estimates of $1.66 billion (46.7% margin, 0.9% beat)
- Operating Margin: 30.3%, down from 37.4% in the same quarter last year
- Sales Volumes rose 1.4% year on year (2.6% in the same quarter last year)
- Market Capitalization: $66.88 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From CSX’s Q3 Earnings Call
- Brian Patrick Ossenbeck (JPMorgan) asked about CSX’s positioning amid industry consolidation and the potential for mergers. CEO Steve Angel emphasized running the core business well and being prepared to capitalize on strategic opportunities when market conditions are favorable.
- Stephanie Moore (Jefferies) inquired about the benefits of recent infrastructure projects and strategic industry changes. CFO Sean Pelkey detailed how project completions set up cost reductions and service gains, while the team monitors industry consolidation for competitive impacts.
- Jonathan B. Chappell (Evercore) pressed on the run rate of expense reductions following project completions. Pelkey broke down the sequential cost benefits, noting that $100 million in network disruption and severance costs will not repeat next year, supporting a margin recovery.
- Brandon Oglenski (Barclays) questioned the ongoing challenge of converting highway freight to rail. Angel explained that improved collaboration between railroads is starting to yield results, especially in intermodal, reflecting increased optimism about capturing market share from trucking.
- Thomas Richard Wadewitz (UBS) sought clarity on which segments could drive growth as markets recover. Chief Commercial Officer Kevin Boone highlighted ongoing momentum in aggregates, cement, and utility coal, while noting that chemicals and forest products remain pressured but could recover with a more favorable economic cycle.
Catalysts in Upcoming Quarters
In upcoming quarters, StockStory analysts will be tracking (1) the pace of volume growth as CSX rolls out double-stack service through Baltimore and leverages its expanded Northeast footprint, (2) the realized margin improvement as one-time project and disruption costs drop off, and (3) the impact of broader rail industry consolidation and new partnerships on CSX’s market positioning. Progress on cost initiatives and stability in key end markets will also be central to evaluating performance.
CSX currently trades at $36.24, in line with $35.96 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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