CSX (CSX) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue rose 2% year-over-year to $3.48 billion, with operating income up 20% to $1.25 billion and EPS increasing 26% to $0.43, driven by higher merchandise pricing, intermodal volume growth, and increased domestic coal revenue, despite lower export coal revenue and benchmark rates.

• Total volume grew 3% year-over-year, supported by gains in merchandise and intermodal segments.

• Expenses declined 6% year-over-year, reflecting efficiency gains, cost reductions, and property disposition gains.

• Operating margin expanded by 560 basis points to 36.0%, reflecting both revenue growth and reduced expenses.

• Safety performance improved, with a 13% lower FRA injury rate and over 30% reduction in train accident rate.

Financial highlights

• Net earnings for Q1 2026 were $807 million, up from $646 million in Q1 2025.

• Free cash flow before dividends was $793 million, up from $559 million, aided by higher net earnings and lower capital expenditures.

• Cash and cash equivalents increased to $964 million at quarter-end, up from $670 million at year-end.

• Labor costs down 1% as headcount dropped 5% and overtime expense fell by $10 million.

• Record first quarter fuel efficiency achieved at 0.97 gallons per thousand GTMs.

Outlook and guidance

• Full-year 2026 revenue growth expected in the mid-single digits, with operating margin expansion trending toward the high end of a 200–300 basis point range.

• Capital spending for 2026 expected to remain below $2.4 billion; free cash flow projected to grow over 60% versus 2025.

• Guidance does not assume a macroeconomic recovery; outlook remains cautious on housing and automotive.

• Management remains committed to returning cash to shareholders and maintaining an investment-grade credit profile.