Despite reaching an EPS of $0.64 according to its second quarter report – a much higher number than the average analyst estimate of $0.59 – on Tuesday, July 18th, CSX Corp.’s (NASDAQ:$CSX) stock fell the next day on July 19th. The company also reported a profit of $510 million in the second quarter, an increase from the $445 million it saw in 2016’s second quarter. Revenue rose by 8% this quarter from $2.7 billion to $2.9 billion. CSX also authorized an additional $500 million to share buybacks in the second quarter, bringing the its buyback efforts up to $1.5 billion.
For its second quarter, CSX reported mixed safety records — a possible explanation of the declining stocks on Wednesday. Despite a 3% increase in train travel efficiency and 5% increase in fuel efficiency, personal injuries increased by 19%.
Another reason why CSX’s stock is falling today may be the fact that its EPS growth did not meet analyst expectations. CSX saw a 45% growth to $2.26 per share compared to last year’s EPS growth, while analysts predicted a 48% growth to $2.30 per share in 2017 compared to last year’s EPS growth.
For its third quarter, CSX expects positive growth in coal exports, metals and equipment, minerals, agriculture and food, and intermodal, with a neutral outlook for transporting fertilizers and forest products. The company also projected a weak growth in the automotive sector, domestic coal, and chemicals for the third quarter. This projection may also be why the railway company’s stock is falling today. CSX attributed poor growth to declining auto production, a weak crude market, and short-haul domestic coal loss.
Regarding CSX’s fiscal year expectations, the company estimates that its operation ratio will be around mid-60s. Free cash flow before dividends is expected to be about $1.5 billion.
As of July 19th, 1:10 PM ET, CSX’s stock fell by around 3.11% to $51.37 from its opening price morning of $53.02.
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