Shares in American freight shipper, CSX, significantly dropped on Thursday following worse-than-expected Q3 earnings per share (EPS) of $0.46 and revenue growth of 1.3% totaling $3.62 billion, which fell short of analysts' consensus estimates. The company cited reduced coal revenue, lower fuel surcharges, and other revenue losses as factors limiting growth.
CEO Joe Hinrichs attributed many of the challenges CSX had recently encountered to the impact of Hurricanes Helene and Milton on their operations and the communities they serve.
CSX also revised its Q4 forecast, stating "external factors make Q4 more challenging." The company predicted that hurricane repercussions would cause volume to grow modestly, and also anticipated a revenue drop of about $200 million due to decreased fuel prices and softer coal markets.
The effects of the hurricanes and a drop in revenue are expected to reduce sequential operating margin in Q4, while impeding margin expansion in the second half of the year. Moreover, CSX predicted capital expenditures (CapEx) of $2.5 billion, excluding reconstruction costs due to hurricane-inflicted infrastructure damage.
These revelations led to a 5% decrease in CSX stock on Thursday, pushing it into negative territory for the year.