CSX Corporation Reports 3% Revenue Decline and 11% Drop in Operating Income for Q2 2025

CSX Corporation reported a decline in financial performance for the second quarter of 2025, with total revenue decreasing by 3% to $3.57 billion compared to $3.70 billion in the same period last year. The company's operating income also fell by 11%, amounting to $1.28 billion, down from $1.45 billion in the prior year. Net earnings for the quarter were $829 million, translating to earnings per diluted share of $0.44, a decrease of 10% from $0.49 in the second quarter of 2024. The operating margin decreased to 35.9%, down 320 basis points year-over-year.

The decrease in revenue was attributed to lower export coal revenue and declines in merchandise volume, which were partially offset by higher pricing in merchandise and increases in other revenue streams. Notably, the intermodal segment saw a slight increase in international shipments, driven by higher port volumes, while domestic shipments faced challenges due to a soft trucking environment. The agricultural and food products segment experienced growth due to higher shipments of domestic feed grain, contrasting with declines in other categories such as automotive and forest products.

On the expense side, total expenses rose by 2% to $2.29 billion, primarily due to inflationary pressures and increased costs associated with network disruptions. Labor and fringe benefits increased by $25 million, reflecting inflation and higher headcount from the conversion of independent affiliates. Additionally, depreciation and amortization expenses rose as a result of a larger asset base. Fuel costs decreased by $32 million, benefiting from a 12% drop in locomotive fuel prices.

CSX's balance sheet showed total assets of $42.93 billion as of June 30, 2025, a slight increase from $42.76 billion at the end of 2024. The company reported a working capital deficit of $678 million, up from $456 million at year-end, primarily due to significant cash outflows for property additions and share repurchases. The company continues to maintain adequate liquidity, supported by a $1.2 billion revolving credit facility and a commercial paper program.

Looking ahead, CSX plans to invest approximately $2.5 billion in capital expenditures for 2025, focusing on safety and reliability improvements, including rebuilding efforts related to Hurricane Helene. The company is also assessing the impact of recent tax legislation on its cash tax payments, which could yield favorable cash impacts of around $250 million for the 2025 tax year. Despite the challenges faced in the current quarter, CSX remains committed to returning cash to shareholders and maintaining an investment-grade credit profile.