What implications did the activities and events of Q2/20 have on CSX? (Tony Hatch)

Hatch Anthony

“The most disruptive quarter ever” – so said Foote about CSX in the rollercoaster of Q2/20. Jim was a major presence on the call (always, of course, as CEO, but seemingly more so in trying to explain – and understand – the implications of this period. Volumes were down 20% but of course, that reflected the steep from in the first half of the quarter and the 20% rapid rebound from the trough. (now +25%). Revenues were down 26% and EPS down 40% (inline, if that matters) while the OR increased 590bps – but still to 63.3%, a rather handsome number in all of this. Labor expense was down 22% as was an adjusted look at an overall expense; crew starts were down 24% versus that 1/5th volume decline. Pretty good, not their best but they appear to be taking the longer-term view here (for example on labor – furloughs versus extra boards, etc).

Operations turned in a solid performance, driving those expense reductions while improving velocity by 6% (dwell increased a bit – 2%, though) and providing good service (on-time originations flat at 88% and arrivals improved by 15% to 84%). Carload Trip Plan Compliance, a real KPI, declined a bit sequentially but was still up 8% to 80.5%; ditto for Intermodal TPC (6% better YOY at 94%); both were improving sequentially in the rebound.