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CSX (CSX) is tracking higher today after reporting its Q3 results last night. The rail operator beat EPS expectations, while revenue was in line, falling just 0.9% to $3.59 bln. The decline this quarter was much less pronounced than in the previous three quarters. Volumes increased 1% yr/yr and 2% sequentially to 1.61 mln units.

• Intermodal was the source of strength despite soft trucking market and muted pricing, with revenue up 4% on a 5% increase in volume, offsetting weaker export coal and softer merchandise trends.
• Minerals, fertilizer, metals, and automotive saw volume gains, led by minerals (+12% volume, +8% revenue), while merchandise, forest products, chemicals, and ag stayed weak amid tariff, trade, trucking and commodity headwinds.
• Operationally, train velocity improved to its fastest pace since early 2021, while dwell time fell to its lowest level since mid-2023. Intermodal TPC rose to 93% (from 90%) and carload TPC climbed to 83% (from 75%), reflecting fluidity of its network.
• With the Howard Street Tunnel and Blue Ridge projects complete, customers should see improved service from fewer out-of-route miles. CSX expects to benefit from double-stack clearance through Baltimore in 2QFY26.
• New CEO Steve Angel downplayed the likelihood of large-scale M&A, citing regulatory barriers and integration challenges, instead emphasizing "best-in-class" performance as key value drivers.

Briefing.com Analyst Insight

This was a solid, steady quarter that helped build confidence under new leadership, showcasing operational progress and improving network performance. Service continues to improve, costs are being well managed, and intermodal is holding up well in a mixed market. While some uncertainty lingers, investors appear comfortable with the company's direction. The stock is edging closer to its highs on the report, though not quite enough to break through yet.