AI Takeaway
In Q2 FY2026, CSX grew revenue 10% YoY to $3.935B and operating income 17% to $1.506B, expanding operating margin by 240bps to 38.3% on higher volume, pricing and fuel surcharge recovery, while diluted EPS rose 23% to $0.54.
Revenue
$3.94B
++10.10% YoY
EPS (Basic)
$0.54
++22.73% YoY
Operating Income
$1.51B
++17.38% YoY
Filed · Source: SEC EDGAR 10-Q filing
Csx (CSX) reported Q2 FY2026 revenue of $3.94B, up 10.1% year over year. The company posted net income of $1B, up 20.9% from a year earlier, with diluted EPS of $0.54.
Total revenue increased 10% ($361M) in Q2 FY2026 versus Q2 FY2025, primarily due to increased fuel surcharge revenue together with higher volume and pricing across merchandise, intermodal and coal. Merchandise revenue grew 8% to $2,446M, Intermodal revenue grew 26% to $620M, and Coal revenue grew 9% to $520M.
Source: 10-Q Item 2 MD&A, p.32-33
Operating margin improved to 38.3% from 35.9% a year ago as expenses grew only 6% ($138M) versus 10% revenue growth; fuel expense rose $177M but was offset by a $39M decrease in non-fuel expense, including $54M of efficiency savings in purchased services and other costs.
Source: 10-Q Item 2 MD&A, p.31, 34
Six-month FCF before dividends increased by $1.2 billion year over year to $1.617B, driven by lower property additions ($1,119M vs $1,495M) following completion of the Blue Ridge subdivision rebuild, higher net earnings, and the absence of a prior-year $429M postponed tax payment.
Source: 10-Q Item 2 MD&A (Non-GAAP Measures), p.36, 39
Train velocity improved 3% to 18.0 mph and FRA personal injury frequency index improved 19% to 0.83, but dwell time increased 6% to 11.0 hours and carload trip plan performance declined 5 points to 71%, indicating some service execution challenges even as safety metrics improved.
Source: 10-Q Item 2 MD&A (Operating Statistics), p.37
CSX had a working capital deficit of $746M as of June 30, 2026 versus $583M at year-end 2025, primarily driven by a $1.0 billion reclass of long-term debt to current liabilities, partially offset by a $715M increase in cash and short-term investments.
Source: 10-Q Item 2 MD&A (Liquidity), p.41
Automotive volume decreased 1% in Q2 FY2026 due to a temporary outage at a customer location associated with re-tooling efforts, highlighting CSX's exposure to customer-specific operational disruptions in the automotive sector.
Source: 10-Q Item 2 MD&A, p.33
Fuel costs increased $177 million in the quarter primarily due to a 74% increase in locomotive fuel prices, illustrating CSX's sensitivity to commodity fuel price swings even though a large portion is recoverable via fuel surcharges.
Source: 10-Q Item 2 MD&A, p.34
Carload trip plan performance declined 5 percentage points to 71% and intermodal trip plan performance declined 2 points to 88%, alongside a 6% increase in dwell time to 11.0 hours, signaling potential network congestion or execution risk that could affect customer satisfaction and future volumes.
Source: 10-Q Item 2 MD&A (Operating Statistics), p.37
CSX's current ratio stands at approximately 0.82, with a working capital deficit of $746M as of June 30, 2026, driven partly by a $1.0 billion reclassification of long-term debt to current liabilities, which could pressure near-term liquidity management.
Source: 10-Q Item 2 MD&A (Liquidity), p.41; Balance Sheet (XBRL)
Purchased services and other expenses included increased advisory expenses related to potential industry consolidation, suggesting CSX may be evaluating or responding to structural changes in the rail industry that carry execution and strategic uncertainty.
Source: 10-Q Item 2 MD&A, p.34
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $3.94B | $3.57B | +10.10% |
Operating Income | $1.51B | $1.28B | +17.38% |
Net Income | $1B | $829M | +20.87% |
EPS (Basic) | $0.54 | $0.44 | +22.73% |
EPS (Diluted) | $0.54 | $0.44 | +22.73% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $44.73B | $42.93B | +4.19% |
Current Assets | $3.41B | $2.31B | +47.85% |
Total Liabilities | $30.64B | $30.55B | +0.28% |
Current Liabilities | $4.15B | $2.98B | +39.26% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $2.6B | $1.89B | +37.51% |
Investing Cash FlowYTD | $-1.32B | $-1.45B | +9.15% |
Financing Cash FlowYTD | $-941M | $-982M | +4.18% |
Share BuybacksYTD | $518M | $1.17B | -55.80% |
D&A | $411M | $427M | -3.75% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 38.3% | 35.9% | +2.37% |
Net Margin | 25.5% | — | — |
ROA | 2.2% | — | — |
Current Ratio | $0.82 | — | — |
Expected release date, analyst estimates & what to watch
CSX delivered strong Q1 FY2026 results with revenue up 1.7% to $3.48B while operating income surged 20.4% to $1.25B, driving operating margin expansion of ~560 basis points to 36.0% and net income growth of 24.9% to $807M.
CSX reported a challenging FY2025 with revenue declining 3.1% to $14.09B and net income falling 16.7% to $2.89B, reflecting significant margin compression as operating margin dropped roughly 400 basis points to 32.1%.
Other companies in Rail Transportation
The filing does not disclose analyst consensus estimates, so a direct beat/miss comparison cannot be confirmed from this 10-Q. However, CSX reported strong YoY growth with revenue up 10.1% to $3.935B and diluted EPS up 22.7% to $0.54, which management highlighted as a 23% increase in the MD&A.
Revenue grew 10% YoY to $3.935B primarily due to increased fuel surcharge revenue combined with higher volume and pricing across merchandise, intermodal and coal segments, per the MD&A. Intermodal revenue was a standout, up 26% to $620M on domestic shipment wins and a tightening truck environment.
CSX's operating margin expanded 240 basis points to 38.3% in Q2 FY2026 from 35.9% in the prior-year quarter, as revenue growth of 10% outpaced expense growth of 6%. Efficiency savings of $54M in purchased services helped offset a $177M increase in fuel costs.
Key risks noted in the MD&A include a temporary automotive customer outage that reduced automotive volume, fuel price volatility (locomotive fuel prices up 74%), and service performance softness with carload trip plan performance down 5 points to 71%. The filing also shows a working capital deficit of $746M partly due to a $1.0B debt reclassification to current liabilities.
CSX generated $1.617B in free cash flow before dividends for the six months ended June 30, 2026, up from $444M in the prior-year period, according to the non-GAAP reconciliation in the MD&A. This improvement was driven by lower property additions after completing the Blue Ridge subdivision rebuild and higher operating cash flow of $2.599B.