CSX Corporation (NYSE:CSX) released its earnings report for the first quarter of 2014 on Tuesday afternoon after the market closed on Wall Street. The company showed earnings of 40 cents per share for the opening months of the year on revenue totalling $3.01 billion. On today’s market the company’s stock trended downward to finish the day at $28.29. the firm also announced a dividend increase of 7% bringing the quarterly return to 16 cents.
In anticipation of the release of this afternoon’s report, analysts following CSX Corporation (NYSE:CSX) were looking for revenue of $2.98 billion from the first quarter report. The same analysts, who were surveyed by Businessweek, were looking for earnings per share of 38 cents.
ADW Capital’s 2020 letter: Long CDON, the future Amazon of the Nordics
ADW Capital Partners was up 119.2% for 2020, compared to a 13.77% gain for the S&P 500, an 11.17% increase for the Russell 2000, and an 8.62% return for the Russell 2000 Value Index. The fund reports an annualized return of 24.63% since its inception in 2005. Q4 2020 hedge fund letters, conferences and more Read More
CSX suffers from the cold
The opening months of 2014 saw the United States paralyzed by an extreme wave of cold weather. CSX Corporation (NYSE:CSX) was heavily affected by the extreme weather, and its first quarter earnings were worse as a result. That means it may take longer than expected for the company to return earnings to previous levels, though the weather brought some positives for the company.
The transportation company is involved in a business that saw lower volumes and higher costs during the period, though it is likely that the coal business benefited from the weather in the first quarter. The rise in the price of natural gas in recent months is another good sign for the company going forward. Moving coal is a high margin business, and CSX Corporation (NYSE:CSX) is ready to take advantage of low stockpiles.
Despite the effects of the weather on the company’s first quarter, CSX Corporation (NYSE:CSX) says that it should be able to make up for the losses through the rest of the year. Railroad transport is a business that has been massively challenged in recent decades. CSX has managed to make itself steadily profitable, despite those challenges and investors are conservatively happy with the company’s progress.
CSX investors expect growth
CSX Corporation (NYSE:CSX) shares are trading at more than fifteen times earnings, implying growth expectations from those trading the shares. The stock traded down in the first few months of 2014, on problems across the board with momentum stocks. The company’s stock has risen by more than 20% in the last twelve months, however, on the back of a massive stock market rally. In the same period the S&P 500 rose by around 18%.
Earnings at CSX Corporation (NYSE:SCX) are expected to increase at an appreciable pace in the coming years. According to a Businessweek survey of analysts following CSX, the firm’s earnings are expected to hit $2.14 per share in 2015. CSX Corporation has been a big grower in the last ten yars, and investors are clearly expecting that to continue. You can’t help the weather, however.