CSX Corp. reported lower revenue and earnings in the fourth quarter amid a sluggish freight environment, with the Jacksonville-based railroad looking to cut costs.
“This has been a challenging year for CSX and for our industry overall, with subdued demand and limited growth opportunities persisting across many of our key markets,” CEO Steve Angel said in a Jan. 23 conference call with analysts.
“Against this backdrop, our service levels remained positive in the fourth quarter, and we delivered modest total volume growth. However, reported operating income, operating margin, and earnings per share were all lower year over year,” said Angel, who joined the company in September.
CSX reported fourth-quarter revenue fell 1% to $3.51 billion, with adjusted earnings falling by 3 cents a share to 39 cents.
The earnings were impacted by $31 million in severance costs and $21 million in technology-related costs, which reduced earnings by about 2 cents a share.
Cutting jobs
CSX Corp. said Jan. 8 it eliminated 166 management positions, or about 5% of its management workforce.
The company finished 2025 with 22,935 employees in its operations which cover most of the Eastern U.S., down 601 from the end of 2024.
Chief Financial Officer Kevin Boone said in the conference call the company is looking at other expense reductions “as we continue to align to the current business environment.”
“We have identified meaningful opportunities to reduce nonlabor spending with well over 100 diverse savings initiatives across the company, including cutting outside and professional service spend, improving asset utilization and maintenance efficiencies, as well as enhancing controls around all sources of discretionary spend,” he said.
Besides the reduction in CSX employees, Missouri-based Railcrew Xpress filed a notice in December under the Worker Adjustment and Retraining Notification Act that CSX was canceling its contract to provide transportation services for train crews.
That cancellation affects 34 jobs in Jacksonville and 48 jobs at five other Florida locations, Railcrew Xpress said.
Revenue outlook
CSX’s total revenue for 2025 fell 3% to $14.09 billion.
Boone said the company expects to increase revenue by a low single-digit percentage in 2026.
However, “the near-term outlook across many key markets remains soft. As we plan for 2026, we do not anticipate any meaningful improvement in macroeconomic conditions,” he said.
Angel replaced Joe Hinrichs as CEO and president amid speculation that the company will consider merger opportunities, after Union Pacific and Norfolk Southern announced a deal in July to create a transcontinental railroad company.
Those two companies filed their merger application in December with the U.S. Surface Transportation Board, and CSX and the three other major North American railroads filed objections to the application, saying it was incomplete.
The STB agreed with the objections Jan. 16, saying Union Pacific and Norfolk Southern need to refile their application with more information.
“I don’t know what conditions are going to be required for approval, that remains to be seen. I think this is a long process,” Angel said in response to an analyst’s question about the merger.
He said CSX needs to focus on its execution and the opportunities it can take advantage of as the merger process plays out.
“As the time comes forward for us to make our case to the appropriate authorities, we’ll certainly be prepared to do that. And then the focus is just making sure that we can be as competitive as we can be,” Angel said.
Ready for storm
CSX’s earnings report came as parts of its rail network were preparing for a major winter storm predicted to affect many eastern U.S. states.
Chief Operating Officer Mike Cory said CSX is well prepared to handle whatever weather disruptions come from the storm.
“We’ve modified our operating plan, working with our customers, notifying them” of potential issues, Cory said.
“I do not see us coming out of this probably for a few days. If we get it Sunday, we’re looking at midweek to recover, but I’m very confident, especially with the condition that we’re going in, that we will come through this with no issues,” he said.