CSX’s fourth-quarter profit fell 2% to $720 million as weak shipping demand and severance costs from recent layoffs pressured results, the Jacksonville-based railroad said Thursday. The carrier earned 39 cents per share, up from 38 cents the year before, though results faced about $50 million in one-time costs tied to CEO Steve Angel’s workforce reductions last fall.
CSX’s cautious outlook reflects pressure from a possible reshaping of the railroad industry. The proposed $85 billion Union Pacific–Norfolk Southern merger, if approved, could control nearly half of all freight and shift the competitive landscape for carriers like CSX and BNSF.
CSX railroad profit fell 2% in the fourth quarter as shipping demand remained weak and severance costs from recent layoffs weighed on results. The Jacksonville-based railroad, one of the largest in North America, reported profits of $720 million, down from $733 million in the same quarter last year.
“This has been a challenging year for CSX and for our industry overall, with subdued demand and limited growth opportunities,” CEO Steve Angel said.
Financial Results
The carrier earned 39 cents per share in the quarter, up from 38 cents per share in the prior year, though results were affected by about $50 million in one-time severance costs related to Angel’s workforce reductions last fall. Revenue slipped 1% to $3.51 billion in the quarter, with the carrier hitting an average train speed of 19.6 mph while delivering 87% of its shipments on time.
Forward Outlook and Strategy
Expecting modest economic growth in 2026, CSX projects revenue growth in the low single digits. The railroad pulled the targets it had previously issued for 2027, signaling management’s uncertainty about the business environment.
Angel said the railroad’s focus is on improving productivity and controlling costs rather than aggressive expansion. “We can create value by running CSX better every day,” he said.
Industry Pressures from Proposed Merger
The railroad industry faces potential upheaval from a proposed $85 billion merger between Union Pacific and Norfolk Southern. If approved, the combined carrier would control nearly half of all freight and could cut delivery times by shaving more than a day off shipments by eliminating a handoff point in the middle of the country.
Angel said he is not yet concerned about the merger because the Surface Transportation Board’s formal review has not started. But most observers believe CSX and BNSF would face competitive disadvantage if the merger is approved. Both carriers have pursued improved delivery times through cooperative agreements rather than pursuing mergers themselves.
Infrastructure Investments and New Services
Meanwhile, CSX wrapped up two major construction projects in the fourth quarter. The railroad completed a major tunnel renovation in Baltimore and finished repairs from damage caused by Hurricane Helene, both of which had disrupted its network and limited its operational flexibility.
The tunnel work allows CSX to begin hauling metal shipping containers stacked two high across its network this year, a high-value service capability that could improve revenue per shipment. However, rival Norfolk Southern announced a similar double-stacked container service in the east earlier this week, matching CSX’s competitive move.