CSX (CSX): Record Q3 sales of $4.02bn as profit per share rises 54% and fuel surcharges lift revenue
CSX, the US railroad that moves cars, chemicals, coal and shipping containers across the eastern United States, reported record third-quarter sales of $4.02bn, up 12%. Profit per share rose 54% to $0.57, helped by higher volumes, higher prices, lower costs outside fuel, and the absence of a charge that hit last year's quarter.
What happened
On 21 October 2026, after US markets closed, CSX published its results for the three months to 30 September 2026 and filed them with the US Securities and Exchange Commission (SEC) on Form 8-K, the form used to report major events. Unless we say otherwise, figures are in US dollars and follow US accounting rules (GAAP). Sales were $4,017m, operating income was $1,570m, net earnings were $1,052m and diluted earnings per share, the profit for each share, were $0.57. The company said the sales rise came from higher fuel surcharge revenue, a fee that passes diesel costs on to customers, together with higher volume and pricing in merchandise, intermodal (containers moved between ships, trains and trucks) and coal.
Traffic grew too. The railroad carried 1,687 thousand units, which is shipments counted as railcars or containers, against 1,612 thousand a year earlier. Intermodal volume rose 7% to what management called an all-time record on the earnings call, which Investing.com summarised. Chief executive Steve Angel said the company is making progress "toward best-in-class performance in 2027". The comparison quarter also matters: in the third quarter of 2025 CSX booked a non-cash goodwill impairment of $164m, a write-down of the value of past acquisitions, which depressed that period's profit.
The numbers, explained
Start with sales. Revenue of $4,017m compares with $3,587m a year earlier, a rise of $430m, or 12.0% (430 / 3,587). Volume grew 4.7% (1,687 / 1,612), while revenue per unit, the average sales earned on each shipment, rose 7.0%, from $2,225 to $2,381. Merchandise, the mix of chemicals, farm goods, metals, cars and similar freight, earned $2,453m, up 11.1% from $2,208m. Intermodal earned $634m, up 20.3% from $527m, and coal earned $537m, up 9.6% from $490m. On the call, the commercial chief said fuel contributed about half of the sales growth, as average diesel prices were up nearly 50% from a year ago. That is a management statement, not a figure we could check in the filing.
Now costs. Total expenses fell from $2,500m to $2,447m, but that includes the $164m impairment last year. Without it, last year's expenses were $2,336m, so this year's expenses rose 4.7%. Fuel expense jumped 60.5%, from $281m to $451m, while purchased services and other, the contractors and other outside costs, fell 10.0%, from $730m to $657m. Labour rose 2.3%, from $815m to $834m. Operating income rose 44.4% (1,570 / 1,087). Adding back the impairment, last year's operating income was $1,251m, so the underlying rise was 25.5%. The operating ratio, costs as a share of sales, was 60.9% (2,447 / 4,017). The same measure last year was 65.1% on the adjusted basis (2,336 / 3,587), so the company keeps about 4.2 percentage points more of each $1 of sales.
Profit followed. Net earnings rose 51.6%, from $694m to $1,052m, and profit per share rose 54.1%, from $0.37 to $0.57. Management compares this with an adjusted $0.44 last year, giving growth of 29.5% (0.57 / 0.44), which the company rounds to 30%. The tax charge was $332m on pre-tax earnings of $1,384m, a rate of 24.0%, against 22.7% a year ago. Over nine months, CSX generated $4,216m of cash from operations against $3,227m, and spent $1,712m on property and equipment, down from $2,225m. Its own free cash flow measure, before dividends, was $2,648m against $1,066m. It bought back $1,061m of shares and paid $779m in dividends. Total debt was $18,804m, little changed from $18,873m at the end of 2025.
Why it matters
CSX makes money by charging customers to move freight on its own track network, so its profit depends on how many shipments it carries, the price per shipment, and how efficiently it runs trains. This quarter all three moved the right way, with the nuance that fuel surcharges added to sales while diesel itself cost far more. The call summary says the chief financial officer put the effect of fuel prices on the margin at about 70 basis points, meaning 0.7 percentage points. The railroad also said its fuel efficiency was the best it has ever recorded and, in the CEO's words, the best reported by any US railroad. That is a company claim.
For customers and rivals, the quarter suggests demand for rail freight held up, particularly for containers, which compete with trucks. Rival railroads also face higher diesel prices, but the benefit CSX shows from surcharges and from fewer outside contractors is specific to its own cost programme. Fertilizers volume fell 13% and automotive volume fell 2%, a reminder that some markets were weaker even as total volume grew. The sector point is simple: a railroad has high fixed costs, so extra volume and higher prices can lift profit faster than sales, which is what the 44% rise in operating income against a 12% rise in sales shows.
What to watch next
CSX has set out full-year targets that can be checked when it reports its next quarter. According to the earnings call, it expects 2026 sales growth in the high single digits (previously mid-to-high single digits), operating margin up by more than 350 basis points, free cash flow growth of more than 80%, and capital spending below $2.4bn. These are the company's own forecasts, not facts. The detailed quarterly report on Form 10-Q is now filed with the SEC, and the company pays a quarterly dividend of $0.14 per share. We have not seen a confirmed date for the fourth-quarter results, so we do not state one.
- Operating ratio: operating costs as a share of sales; lower is better
- Fuel surcharge: a fee that passes higher diesel costs on to customers
- Intermodal: containers moved by a mix of ship, train and truck
- Basis point: one hundredth of a percentage point
Sources
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