CSX to Report First Quarter Results: Will Costs Affect Results?

CSX Corporation CSX is expected to report its first quarter 2022 results on April 20, after the market closes.

Zacks’ consensus estimate for the company’s first-quarter earnings has been revised down 10.5% over the past 90 days. However, the company has an impressive track record of earnings surprises, having topped the Zacks consensus estimate in three of the previous four quarters while missing the same in one.

Let’s see how things look for this earnings season.

Price from CSX Corporation and surprise EPS

CSX Corporation price-eps-surprise | Quote from CSX Corporation

Factors to Note

Supply chain disruptions, including labor and equipment shortages, are expected to have hurt CSX’s performance in the first quarter.

The performance of the goods segment is likely to have been affected by low volumes due to weak automotive volumes, resulting from shortages of semiconductors. Zacks’ consensus estimate for merchandise volumes points to a 4.5% decline from the number reported for the sequential quarter.

In addition, CSX’s bottom line is likely to reflect higher costs due to increased labor and incidental expenses, purchased and other services, and fuel expenses.

However, the acquisition of Quality Carriers in July 2021 should have boosted the company’s revenue in the first quarter.

Earnings Whispers

Zacks’ proven model does not conclusively predict a beat in earnings for CSX this time around. The combination of a positive Earnings ESP and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating Earnings. However, this is not the case here, as explained below. You can see the full list of today’s Zacks #1 Rank stocks here.

ESP Earnings: CSX has an ESP on earnings of -3.52%. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

Zacks Rank: CSX wears a Zacks Rank #3.

Fourth Quarter Results Highlights

CSX’s fourth-quarter 2021 earnings of 42 cents per share beat Zacks’ consensus estimate by a penny. Net income improved double-digit year-over-year on higher revenue. Total revenue of $3,427 million topped Zacks’ consensus estimate of $3,296 million. Revenue jumped 21.3% year-over-year, driven by growth across all of its businesses, in addition to revenue from Quality Carriers.

Actions to Consider

Investors interested in the broader transport sector may consider Landstar system LSTR and Knight-Swift Transportation Holdings KNX. These companies have the right combination of elements to beat on earnings in this reporting cycle.

Landstar System has a +9.22% Earnings ESP and is currently a #3 ranked Zacks stock. LSTR will release first quarter 2022 results on April 20.

Landstar’s first quarter results are expected to reflect gains from an improved US freight scenario. Higher truck rates, due to limited truck capacity, should have contributed to performance in the March quarter.

Knight-Swift has a +4.17% Earnings ESP and is currently a #3 ranked player. KNX will release Q1 2022 results on April 20.

Knight-Swift’s first quarter results are expected to be helped by an improved US freight scenario. Revenues from the Logistics segment are likely to have been high due to an increase in the number of shipments and revenue per shipment.

Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.

Zacks names ‘only one best choice for doubling up’

From thousands of stocks, 5 Zacks experts have each picked their favorite to skyrocket by +100% or more in the coming months. Of these 5, Research Director Sheraz Mian selects one to have the most explosive advantage of all.

It’s a little-known chemical company that’s up 65% year-on-year, but still very cheap. With relentless demand, rising earnings estimates for 2022 and $1.5 billion for stock buybacks, retail investors could jump in at any moment.

This company could rival or surpass other recent Zacks stocks which are expected to double like Boston Beer Company which jumped +143.0% in just over 9 months and NVIDIA which jumped +175.9% in one year .

Free: See our best stock and our 4 finalists >>

Click to get this free report

CSX Corporation (CSX): Free Stock Analysis Report

KnightSwift Transportation Holdings Inc. (KNX): Free Stock Analysis Report

Landstar System, Inc. (LSTR): Free Stock Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.