CSX Corporation (CSX) provides rail, intermodal and rail-to-truck transload services and solutions to a broad array of markets. With a network connecting two-thirds of the U.S. population, the company has played a critical role in the nation’s economic expansion and industrial development over the past 200 years.
The company generated most of its revenue from chemicals (21%), intermodal (17%), coal (12%), agricultural products (12%) and automotive products (10%) during the third quarter of 2020. Most of these revenues are generated under contracts with customers on a rate per carload, container or ton-basis based on the length of haul and commodities carried.
Mixed Earnings During COVID-19
CSX Corporation reported fourth-quarter revenue that fell by 2.1% to $2.83 billion, beating consensus estimates by $40 million, but GAAP earnings of $0.99 per share missed consensus estimates by three cents per share. Intermodal growth was more than offset by lower fuel surcharge revenue and declines in coal transportation.
Despite COVID-19-related challenges in 2020, there are signs of an uptick in 2021. The Association of American Railroads reported U.S. rail traffic up by 4.7% in the first week of 2021 driven by grains, metallic ores, and metals and chemicals.
The company raised its quarterly dividend by 7.7% to $0.28 per share, which represents a 1.2% forward yield. The dividend is payable on March 15, 2021 to shareholders on record as of February 26, 2021.
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