CSX Corporation (CSX) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 20, 2023 4:30 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to the CCSX Corporation Second Quarter 2023 Earnings Conference Call.

I will now turn the call over to today’s speaker Matthew Korn, Head of Investor Relations. You may begin your conference.

Matthew Korn

Thank you, operator. Hello, everyone, and welcome to our second quarter earnings call. Joining me this afternoon are Joe Hinrichs, President and Chief Executive Officer; Jamie Boychuk, Executive Vice President of Operations; Kevin Boone, Executive Vice President of Sales and Marketing; and Sean Pelkey, Executive Vice President and Chief Financial Officer.

In the presentation accompanying this call, you will find our forward-looking disclosure on slide two followed by our non-GAAP disclosure on slide three.

And with that, it's my pleasure to introduce Mr. Joe Hinrichs.

Joe Hinrichs

Thank you, Matthew, and good afternoon, everyone. Thank you for joining our conference call.

Our performance over the second quarter met our expectations led by the strong results of our merchandise business. As we had indicated at year-end and again last quarter, we knew that we would have to manage through lower intermodal storage revenue and normalizing export coal prices. We expect the intermodal volume to be soft as imports slowed and destocking activity continued.

That said, we also knew that we were gaining momentum with our customers, led by our improved service performance and in our own workplace as our ONE CSX efforts took hold. Our network continues to run well, and our company's initiatives combined with our employees' hard work and commitment to making a big difference and helping to set our railroad apart. There was much more to do, but our results this quarter show signs of the progress we are making as we lay the groundwork for long-term growth and value-creation.

Turning to slide five. Let's review the highlights for the second quarter. We moved over 1.5 million carloads in the second quarter, led by a 3% volume growth in merchandise and 4% growth in coal, and our margins remained strong with an operating ratio below 60%, including the impact of the Quality Carriers' trucking business.

We generated $3.7 billion in revenue, which was 3% lower than the previous year and flat from the first quarter. Operating income decreased 13% year-over-year to $1.5 billion and our earnings per share decreased by 9% to $0.49. When making comparisons to last year, it's important to remember that our second quarter 2022 results included a $122 million gain, representing $0.04 per share of EPS related to the Commonwealth of Virginia property sale.