The efficiency gains has been a key driver for CSX Corporation CSX to deliver a better-than-expected earnings for its third quarter.
CSX's reported third-quarter EPS of $0.48 topped Oppenheimer estimate/consensus of $0.46/$0.45, respectively. Although revenue declined 7.8 percent to $2.710 billion, it was above Oppenheimer's estimate/consensus of $2.673 billion/$2.688 billion as macroeconomic/energy headwinds impacted most markets.
A primary component of the CSX story, the company achieved $112 million of efficiency savings in the third quarter, bringing its 2016-YTD total to $341 million. The company also increased its 2016 efficiency savings guidance increased to about $400 million from $350 million plus.
“CSX alluded to ~$150 million of incremental base efficiency savings as a reasonable starting point for 2017,” analyst Scott Schneeberger wrote in a note.
The analyst also raised his 2016/2017 EPS view to $1.79 (from $1.77)/$2.00 (from $1.93).
“CSX is progressing nicely on efficiency savings, though we're maintaining our Perform rating pending a swing in top-line momentum/sustained operating ratio strides,” Schneeberger added.
At the time of writing, shares of CSX were up 0.56 percent to $31.33.
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