CSX Revenue Jumps 12% to Record as Operating Margin Widens
Key Facts
Railroad operator CSX reported a 12% year-on-year increase in third-quarter 2026 revenue to a quarterly record of $4.02 billion. The increase coincided with growth in freight activity and improved profitability, according to the earnings statement the company had scheduled for release after the market close on Wednesday, October 21, 2026. Total freight volumes rose 5% from the same period a year earlier. Total shipments during the quarter reached 1.69 million units, according to the company's official disclosure. Revenue growth outpaced volume growth, with pricing and fuel surcharges contributing to revenue. Following the results, the company's shares rose 4% in after-hours trading on Wednesday, according to Investing.com.
On the operational front, the company posted third-quarter operating profit of $1.57 billion, up 44% year on year, according to its statement. Operating margin widened by 880 basis points from the same period a year earlier. The margin reached 39.1%, an improvement that coincided with higher revenue and lower operating expenses. Those expenses totaled $2.45 billion during the quarter, down 2%, according to Investing.com. Net income was $1.05 billion, according to the company's reported results for the period, with reported operating profit growth outpacing annual revenue growth.
Diluted earnings per share were $0.57, up 54% year on year, although the comparable period's results included a non-cash charge that affected the basis of comparison. The company recorded a goodwill impairment charge of $164 million in the third quarter of 2025, according to its disclosure. Compared with adjusted earnings per share for the corresponding period, which exclude the impact of that charge, growth was 30%. On the same adjusted basis, operating profit rose 25% from the comparable period, versus the higher growth rate in reported results. Net income also rose 29% compared with the prior year's adjusted results, with the improvement spanning operating profit, net income and earnings per share after excluding the goodwill impairment impact from the comparison period.
CSX attributed revenue growth to higher "fuel surcharge" revenue, alongside increased volumes and pricing in merchandise, intermodal and coal. Intermodal freight volumes rose 7% year on year during the third quarter, outpacing the company's overall freight growth. That followed a second quarter in which total freight volumes increased 6% year on year. Intermodal had led volume growth in that period, rising 9%, according to the company's filing with the U.S. Securities and Exchange Commission. Freight growth thus continued in the third quarter at a slower pace than in the previous quarter, both overall and in intermodal. Second-quarter revenue, meanwhile, had reached $3.94 billion, up 10% year on year. Third-quarter revenue exceeded that previous quarterly level, while annual revenue growth accelerated despite slower volume growth.
CSX provides rail and intermodal services, as well as freight transfers between trains and trucks, according to the company description in its earnings release scheduling announcement. The sectors it serves include energy, industrial, construction, agriculture and consumer products. The results announcement followed the company's announcement on October 12, 2026, of the retirement of Executive Vice President and Chief Operating Officer Mike Cory. Under the management arrangement it announced, Doug Rehorchuk, who oversees operations, began reporting directly to Chief Executive Steve Angel. Casey Albright, who oversees network operations and service design, also began reporting directly to Angel, according to the company's statement on the chief operating officer's retirement.