January 23, 2025
Release Date: January 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Q : How do you think about full-year margin performance given the headwinds in the first half of the year? A : Sean Pelkey, CFO, explained that margin improvement is unlikely in the first half due to concentrated headwinds, especially in Q1. However, he anticipates potential growth in operating income and margins in the second half, assuming a stable operating environment and easing of headwinds.
Q : Do you expect to grow operating income this year despite the challenges? A : Sean Pelkey, CFO, noted that without the $350 million headwinds, CSX would see solid growth in operating income. However, due to utility coal headwinds and mine issues, growth might be towards the lower end of the mid- to high single-digit range, with a rebound expected in subsequent years.
Q : Have there been any changes in customer conversations regarding the industrial development pipeline post-election? A : Kevin Boone, EVP of Sales and Marketing, stated that contrary to expectations of a pause, there has been healthy activity with new projects coming in. The team remains busy, and they anticipate acceleration with potential policy changes.
Q : Can you discuss the impact of tightening truck capacity and its reflection in results? A : Kevin Boone, EVP of Sales and Marketing, highlighted that intermodal is the most obvious area affected, but there's also work on merchandise side truck conversions. He expects discussions to accelerate as customers seek cost savings, with potential benefits in intermodal pricing as the year progresses.
Q : What are the long-term benefits of the Howard Street Tunnel project and other infrastructure improvements? A : Joseph Hinrichs, CEO, emphasized that the Howard Street Tunnel project will enable double stacking along the East Coast, enhancing CSX's competitive position. The project, along with other improvements, is expected to yield significant benefits in 2026 and 2027, supporting volume growth and efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
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