Shares of CSX Corp. (CSX, Financial) plunged 6.29% to $74.55 in after-hours trading on Tuesday after missing consensus estimates for GAAP earnings and revenue for the second quarter of 2019.
GAAP earnings per share were $1.08 versus projections of $1.10. They increased 6.9% compared to the prior-year quarter.
Revenue was $3.06 billion, down 1% year over year as a result of weakness in the company's intermodal business, which offset merchandise growth. Second-quarter revenue fell $80 million short of expectations.
The Jacksonville, Florida-based provider of rail-based freight transportation services also reported that, due to improved operational efficiency and volume-related cost savings, total expenses declined 3% to $1.76 billion. Therefore, operating income increased 2% to $1.31 billion.
Further, CSX achieved an 120 basis-point improvement in its operating ratio to a second-quarter record of 57.4%. In the same quarter of 2018, the operating ratio was 58.6%. The OPEX compares the company's total operating expenses to its net sales to determine how efficient management is.
The stock has gained 15% over the past year to $79.55 per share, for a market capitalization of $64.4 billion at close on July 16. The share price is slightly off the 50- and 100-day simple moving average lines and well above the 200-day line. The 52-week range is $58.47 to $80.73.
Analysts assigned an overweight recommendation rating with an average target price of $82.10 per share. The overweight rating means analysts expect the stock to outperform either the industry or the overall market.
Disclosure: I have no positions in any securities mentioned.
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