CSX (CSX) 17 Apr 242024 Q1 Earnings call transcript

Good afternoon, everyone. My name is Briana, and I will be your conference operator today. At this time, I would like to welcome everyone to the CSX Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Matthew Korn, Head of Investor Relations.

You may begin your conference.

Briana. you, Thank good earnings and welcome our to Hello, afternoon, quarter call. first everyone, and

this Hinrichs, Chief Chief Joining Executive are Executive Chief afternoon me Joe Sean and Cory, Boone, Vice Pelkey, Vice Commercial Kevin Officer; Officer; President President Executive President Officer. Officer; and and Operating Vice Executive President, Financial Mike Chief and

pleasure for the to is disclosure and forward-looking presentation with slides our it Hinrichs. Joe accompanying In Mr. that, non-GAAP introduce this your disclosures find now With call, my you will review. our

All has joining right. it when that expectations. have already CSX solid you, Thankfully, you Thank us of our [indiscernible] challenges. great Matthew. people. Hello, that XXXX our over had number a Thank everyone. start was brought never for comes with learned an call. in to easy line year first it a quarter we CSX is I've XX,XXX really team ONE a of quarter, this and

has volume have has been Baltimore, And as in particularly deep CSX course, a latest of you've Francis [indiscernible] severe incident, of our early we business. there, January. with seen forward weekly historical coal had The weather the and in performance, the periods relationship important after Key kept operations collapse. Bridge Scott our with tragic moving export

for call, now the event of the committed we are already in being what to our the and reopening to our tell Cory help see port. customers. you part mitigate impact happy Boone to will Later to progress about doing we made We're the and doing city this are more recover, the Kevin for Mike

compared today. momentum the the are built fourth and very we and the did knew our opportunity had we quarter, All that the business we are profitability over that. grow that to seeing we just with to quarter pleased the in We said,

have done maintain the was more so. service we our levels, run to strong network looking efficiently, for goal ways and customer to Our while

have our the and excited we are We in rest do, of more year. confident are and the railroad to work about

start key results from with where Intermodal solid with highlight from by compared Now Total to some grew a Slide X% we X% franchise, at let's business X, our -- which our our quarter. grew volume strong last first of year. support the

margin operating which basis reached point compared XX quarter. XX.X%, the improvement Our fourth a represents to

declined than last Revenue under ago our and lower X% of while compared quarter. year, was compared versus last income up share previous And but X% flat grew than to a X% just about by the EPS X% was sequentially. billion by $X.X Operating lower X% last year per earnings year quarter. to

great this across entire the Now ONE our first we more and good knows all that that we the reflected is given the opportunities The quarter progress. ahead altogether, solid entire railroad. there that much achieve, team CSX was can have a people

XXXX, before with thoughts career, conversations bring and President And Jim outsider history, our begin, CSX. I his thank throughout away our late guided his insightful in September recognize and the several have and recruited to in for of CEO XXXX We and to changes industry all rebuilding and out an to contributions for passed December as network Directors Board And dramatic I to we to railroad XXXX. his go the including and in CEO XX-plus-year prayers this thank Jim family being the CSX friends. and overall company with very our some Jim pandemic. moment was transformative and [indiscernible] He our come challenging like CSX. earlier impactful in support to with Jim of is his remember and arrived through in Foote, COVID week. I'd the times Jim take after this until to a I who dealing

me let new to discuss a identity operational the Cory, CSX to tremendous energy performance. new turn to over and our has Mike amount who call of brought Now

thanks, and the be Joe, taking you, Thank everybody, time today. for Yes. to with us

Just slide look safety. at on the first

FRA overall pale improvement in year-over-year, While and performance accident my in this we what is view, quarter will our in train the results comparison team rate this deliver. saw an capable to

requires. we the cause So information the pass risk strong opportunity And the This begun union that order from [indiscernible] their collectively supervisors. team, for we performance, learn and training different And that our in management we've identification a of all and work strong is employees elevate to everything thoroughly and to improving safety and follow-ups, in the actions the our a key change through to to portals [indiscernible] and use on safety employees to provide beliefs from successfully a shared, better incident a to information includes safety root our skills. as proactive culture. necessary oversight really determine ensure to build integrate and to and every recognize and investigate we need culture We

with change union partner to so help all risk to starting safety benefit sides, I'm our but creating and to is tolerances our pleased towards strong this a This on far. provide effort culture. with us And very property. our time real We're progress across starting leaders partnership takes

needs to customers in for way. efficient listening response our a also to employee our and and We're order our safety suggestions in safe applying we're to

this that And Let's velocity look [ see slide, next we'll looking at sure standard today. at I'm about to going talk our ] you're slide. Gol and the metrics

grown with we've on or increase quarter on capital service also handled decrease velocity you've with have properly. the slight focus while program is the providing customers for sizes dwell, up And focus management controlling flat volume to have our be strong line all our in X.X% time currently X%. done customer to includes cost carloads of and enough large engineering is [indiscernible] remain they up sure has [indiscernible] our increase making we work in for costs. in Our working year-over-year. been seen the a have this in train

track also both Titan all with result, scheduled velocity seen and are time a and enforced our as crews, we've are planned decreases efficiency seen we've for we've rails, for reductions. good well. costs, accomplishing in As increases unit crews in structure work reductions gaining of their slight compliance And

Our plan and that intent of velocity. work the I to a right improvement refine as lots with beyond. inclusive build and And this the plan this the continue see of provides is rest cycle year's expect and to minimizing more develop [indiscernible] execute we to for

of speed as handling, no in some benefit increase needs and capacity customer efficient an and into to the utilizing to improve Intermodal as will out running the servicing even be. to to to plan plan. will also our our attract reduce On compliance gain but network driver goal improved and of of yard most that to can open we arrival experience Our which best terminals. efficiency going focus new measure as truck some also make we slide. trip operations, reconfiguring strategic could This these we remains are there's as our part they identified is the the us see service we convert up see on not And in cost-saving at operating We productive customer times the corridors. next opportunities the our will cost cars our you're perform still customers customers from allow business strategically metrics, change a by that strong. to this into and locations customers' turn changes the assets consistently truck collaborate availability, share, which excess customers as of remain route to has high, our slide, our can. Having these with to that's rail. our important Over way

fluidity our needs our and process of is asset better nearly compared together Intermodal As at the we've that to as by footprint but well to as both in terminal use a assets, year expectations. example, has in driver Farbine leader an domestic of the a XX% weeks put customers' Southeast the business, dwell that. to Ferber earlier team, and Atlanta Intermodal for previous creating our performed not a reduced has for in and recent critical developed turn, our

for from opportunity conversion more and truck. capacity to leads This

declined the remained that customers for improved experience trip quarter has first QX. CSX. month with carload the of over but service Our in the our We're of proud slightly compliance XX% and very

we've first our and the another customer metric be switch important which this of to on commitments and mile a short our added as represents slide for show at reliability most on last partners. data, our of this, able and To service to deliver customers line

As very see, can remains you high. this

focused service best and for of is closing, service In our efficiency focused on provide opportunities a climate all to product continue involved, safety, waiver success us. ahead on team as customers. of many we creating the can have are The we we for

Kevin. you, to over that, with And

that our with afternoon, right. you, The solutions good and target All bringing share to the momentum to targeting quickly conversion profitable everyone. continues Thank team market growth. build mobile Mike, and customers.

strategic customers quickly great ability rail was the to and with discussions identify our conversion we rapidly team working truck opportunities allow to by to a weak focusing opportunities, of our to market, has meet Our alternative stood closer community. industrial the accelerating joint continuing service. that and solution an done job react truck in highlighted to a best-in-class from customers solutions needs our new Intermodal provide developing efforts on our benefit development, our the Baltimore. including for partners Despite rail up Where

differentiator between is sales for key collaboration Communication and operations and and marketing a CSX.

first the began shows of trajectory the highest we quarter we since on. survey, are service Voice results that the highlights for the survey recent scores which the positive Our Customer

at Slide to merchandise turn our Let's X to performance. look

up volumes Our with were RPU. compared X% year a flat merchandise last in increase revenues to X% and

mix of renewals than more favorable and contract fuel effect offset surcharge. As slightly the lower

plants. start. construction and accelerated overall, basic appears were at a the Mortgage product gain saw start our in manufacturing encouraging but in season slow off a to sides pulpboard largest be momentum after plastics, to to automotive flat market, Chemicals, volumes and [indiscernible] products the as Across stronger continues building nicely lines, GLs. several

unseasonably that accelerate. a strong projects backlog We tough comparison construction were of faced Minerals for very told a is demand expected aggregates, strong of XXXX. which the in first spending infrastructure total large against quarter healthy with The you to

weaker a affecting back were year. deal in certain sluggish, sequential with volumes bit been see the opportunity for Finnish improvement of the in a the bit also half flows but weather scrap markets. has Metals year-over-year we

supported higher an in other and continue fertilizers, demand markets production by Fertilizer lifted issues application here shipments early for but RPU. haul volumes season certain potash longer yield our of be in which haul, impacted to Florida, phosphate

remains is food which will exports solid, normalize Underlying food crops many our were into supplies, Finally, our of relatively ag availability high demand a customer regions. soft, global grains, strong year. speed and by U.S. the across conditions local of the business products back challenging constrained limit of in for still demand soybean optimistic and and half

to Turning Slide X.

volume X% was a X% largely as the first fuel to due offset year-over-year growth quarter, revenue For all-in coal RPU, was flat surcharge. decline in by

Our slightly favorable export benchmark-based benefit year, were but mix got the yields to side. last on from we lower domestic some also compared

export by expected, operations meet markets by XX% really testament reflected the is export increased As credible the with the team, work tonnage strength year-over-year. to including shipments It in the work demand. great a to the up

anticipated challenged low also domestic year's that lapping and market would last be gas by We restocking the demand. natural prices

very XX% of stress shipments city. Bridge, With person going of is a partnership Domestic against our how collapse the effects of with the for the XXXX. quarter the and to down in Baltimore first the important quarter the were Key I'm tough

is and noted the going back our very solutions find the a alternative hard to the Baltimore, with customers. ONE Joe working and have before, help railroad, community team of long beginning we to CSX history our As to

that the and of to with will coal load Joe unable Bay export see the I senior joined vessels. are the days dual-served headwind near-term CSX, Curtis impact facility CSX, terms to export key following facilities. alternative console In both leadership our from terminal marine to those incident, and revenue Two a

Baltimore month, a outlets. closures divert our volumes estimate which to to including by the revenue other by $XX these to begun Currently, remediation vessels benefit million of we CSX the $XX It's net already have from million the that be [indiscernible] We of of channel the engineers early very need depth as reopened tons. impact per port to and some end coal for we of full diverting projected the the in the still May. of process portion

communication a that to for with to also good run see full of the It's ramp in potential meantime, rate. take and up partners, congestion to local In you we are weeks reopening, time, there's federal business after amount a state, likely customers, it back but few authorities. immediately our studying

as We successfully to team closely are Mike working customers we with all sure to as his are and make our possible. available serve optimizing resources

more X% on was put and increased X%. gain our of on volumes Growth lanes lower higher saw contracts, healthy consumer partners, a very supported X. volume normalized year-over-year shipping from demand We conditions. levels. and inventories Turning RPU for many Slide as strong our X% year's new new last surcharge endpoint comparison with have increase mix, with or growth, and to negative Intermodal weak International Revenue business. by as lower we fuel market our

positive and over rest We year. are very recovery look the the we demand encouraged continued we as of are by seeing signals the

also Our couple domestic grew of a what moderate seen over the Intermodal business the pace at over quarter than quarters. last more we've

market. capacity service weak which as win truck in conditions us market continues normalize drive new benefit that performance, We're business What's help and a will even been constant and to truck is time, optimistic intermodal persist. truck our the conversion,

rebounds. we will prepared confident are the demand when we importantly, More be that

to industrial Slide XX, turn program. have we on where an development update our Finally, let's

pipeline us to that's rail partner served diverse eager attractive is to often project capacity strong, really overlooked our of remains hundreds ways development production with with projects to are. sites, how find expand Our companies on something these

shows our these in new capacity approximately have facilities force XXX chart that key based on new have and last of investment expenses billion such on in the months, the The split as over many chemicals, potential markets, and online sites for market the represent volume XX minerals added carload in products. the come $X.X total capital left

starting development meaningful this scratching that X this be up are constructed total takeaways The market the the chart year in anticipate proposals activity But as from split pipeline, the from a key later several the for will acceleration opportunity ranging view, to as projects right is potential carload the surface. we that look years now. project only this full on by measured There from shows capacity forward-looking we estimated expected forward. implies

diverse. encouraging is long-term into pipeline and can very setup shift, can multiple time meaningful lines for is Scopes over change but growth contribution the also the Segmenting years.

vehicle are related battery with approximately together they several combined to We scheduled excited XX% potential. multiple total volume of next the come are the about electric facilities And facilities or that online over manufacturing the material long-term years. represent the raw

of CSX contributors. represent larger This and chemicals build to big our and you possible. this development working projects partnerships metals, excited much all more tell team Minerals, industrial a make other a We're that been nonstop for to is has the come. opportunity that there's to

to -- me let Sean. me you. that, it With let it Thank over turn off hand

Thank good you, Kevin, afternoon. and

items operating First million year, fell impacts last include These as of quarter recovery, well revenue results was by X%, $XXX million. with other declines discrete year's net changes insurance while from income the higher, the down as in slide. fuel in next revenue . Across the coal prior benefiting X% coal X% or in and fuel number approximately merchandise $XXX pricing. versus a on were increased quarter, in will volume and I X% from detail the and line export revenue X% pricing intermodal, growth strong across and items excluding more the portfolio. recovery, discuss Expenses Merchandise of

generated reflect control quarter initiatives. and our and second by in sequential line net headwind performance $XX despite continued a to operating consecutive efficiency broad-based the One CSX growth momentum cost Underlying income service-driven of team, million was QX results fuel top relative QX. our

deliver effective expense fell slightly was million income to In us This and rate. million operating $X sequential basis team's performance. year, focus a pretax lower the back the momentum of positions while net points, demonstrating in service year-over-year XXXX. well grew of Interest on other and XXX growth earnings, addition, to efficient tax half compared nearly on this margins gains $XX higher prior expense higher

mentioned result, of impact decreased discrete $X.XX per the items. from previously $X.XX, including a share As earnings

now look to next expense a Let's slide at Total take and by increased expenses. $XX closer million. quarter the first turn

volumes. and costs to items. be per fourth sick $XX Turning incentive cost statable Even we in favorable Total again quarter, mostly despite should the the versus compensation. million, employee union individual down higher fringe impacted line sequentially per higher Labor so, headcount, by expect increased and higher pay QX. employee was employee seasonal inflation, count remain and to head from cost

increased drive a gains overhead insurance operating million, million which from prior budgets. evident other Efficiency impact represent Purchased cross-functional line collaboration $XX sustainable cost improvements services expense year on includes recovery. to both and across a this and significant $XX

We forward. continue expect this going momentum to

Depreciation cost smaller degradation seasonal a than $XX asset severe was And full Fuel up despite was quarter. base. in to larger saw driven which in million QX. $XX from [indiscernible] the due price. and efficiency, million, improved mostly down year-over-year Progress a lower weather early continued winter normal by fuel

$X while and million, million. equipment increased unfavorable Finally, $X property by gains were by rents

Slide of payouts. cash driven in year lower flow to year-to-date, distributions net earnings, and business flow in offset on turning and wage investment And cash prior by back XX. by a payments, is decrease deferred partially million Now $XXX the tax Free increased

A-rated balance exits QX healthy a CSX with credit an sheet and profile.

safety, opportunistic Our towards first CSX and nearly returning our $XXX shareholders, approach dividends, repurchases to to capital reliability distributed priority long-term and between remains demonstrating investing growth. cash. excess share but split balanced million also

believe a our our aligns that also economic on We of interest profit long-term with shareholders. focus

quarter off returns capital While as economic on increase maintaining time attractive efficiently profit due highway, and to strong asset freight it our spending. while to utilization declined discrete we over previously first mentioned expect the we convert headwinds,

turn Joe back Now with his remarks. for let me that, it to closing

Sean. All right. Thank you,

XXXX, conclude walking will our remarks our we Now which for guidance has the by through not changed. full year

we volume low to to revenue service, customer total and total the in our expect range. mid-single-digit by Led continue growth

give the truck ramp-up in We from development industrial and of build favorable momentum on the expect wins, business through end effects projects many trends of to markets. as merchandise year conversions our new our business

retail by more driving supported consumer which Intermodal, in are normalized improved demand port We look for stable steady inventories, activity. growth and

as share soft. creative closely work truck market partners, channel remains finding our We solutions to with even continue the to gain

as but have much quickly coal rest [indiscernible] high team compared taking can. the full to to And operation. be some Curtis remained the back of export limit to as actions returns impact ramp though once effectively up in the ready as coal franchise across near fluctuated we the term, Bay as prices the of history. the we of at situation of and possible the of are to the Port channel Global benchmark Baltimore volume mitigate

call, the gains we heard made operating improve and And sequentially. this saw to and results solid from and progress operations on team benefited quarter this efforts profitability, margin -- volume our growth, from pricing good focused grew as efficiency you On in our and we productivity.

to Baltimore is while deliver our goal margins challenges, the very prices year. Our time. second consistently are near-term And feel grow about strong in incremental over global and our ability we this coal half of performance good to

There forecast is our no change CapEx billion. to $X.X of

as opportunistic CSX heard where As proud approach how there to conclude, to remains Sean, our safer, term. returns potential reliably the place. plan, growth focused the so were during good team execution, over in many To There for I and every you customers profitable the our from ONE am our more our faster quarter, can achieved distractions, and stuck long we effort make balanced on more much to results. is customers, deliver prioritize we very run capital to of come

Thanks to your questions. to ready you and the take we're company for interest [indiscernible], all of

Thank you, Joe.

session. ready to we question-and-answer please ask one to take question. part, time We to make Briana, process. the will now and interest that start limit our the of you only this yourselves to to and opportunity call everyone to an on has we're sure move In one

Matthew. you, Thank

Your comes Stephens. from first Justin Long question with

the from those you But you going the ask second And think my in margins start, and I well? both impact great for sequentially any earnings. Do Typically, a Jim's port along the have our to left still as RPU he prayers improvement guess, question, coal despite you the then second about if Obviously, lines, curious around wanted that's seasonal Baltimore to I see to possible closure? in thoughts quarter and are family. a industry. legacy And quarter. on the thoughts out

those take of Justin. Happy both to questions.

we the see in be So QX impact earnings going sequentially from to still grow should what felt we second in feel that quarter, we Baltimore the sequential be that's able to QX to while clearly, from terms improvement, normally QX. to of is QX,

while both headwind think really And what being but able has costs I of would not and top RPU, The strong coal, come QX say terms down. to Baltimore that's I do in is clearly is as line to well QX. from pricing impact, incremental just deliver export margins containing it the as

high QX our right to momentum. about from coal ability now single-digit in we're something QX. that's to feel to I a lead going But is this the seeing in to pretty What still continue even marketplace backdrop, probably that good with to decline mid- RPU

next comes Your Evercore ISI. Chappell question from with Jon

velocity your this you Mike, as and talked probably you slides, little bit a dwell on about indicated in call.

you been well. have you of bit weather So in state Baltimore the the of of was disruption, a first filtered as whether moving of on just you right into March, part in as the last have couple obviously, moved next port soon weeks? the direction, January Can things there's in into April some union but of metrics of some maybe of how kind back a it in started as them as kind little and us those or give the in why opposite direction, get when

make clear. significant, not Thank then These the metrics them. happy want you are John. very and in questions. They're it to for I just not perspective loud put with sure, important. here. I'll really We're and Yes, it much extremely

the of some -- system. really shocked we So of . the

to look the engineering efficiency at things first capital start our the was programs. really we of of -- did One capital

should last envelope. didn't $X.X frankly, we $X we billion than work more we got the for done, So that paid get billion and work done. we've the year, have -- And quite

with be these do curfews to big very out gangs their truck anytime out the about and X between is needed to So giant hours, [indiscernible] and name work XX were and it. there you this that strict year, decided we we going all get the ties, rail across bridges,

that storms, the the guns. because We went our early We it our winter dwell after the February, we really probably this our in can that the congests southern dip, yard, around January, stuck started we and after of run started. line corridors. at winter curfew, the terminals probably through to also the again, late traffic. around in bunches you cars held impacted And But trains, with to the see

thing working really that since And let start a to but thing of work. winter we're the the we and did during in the so that up the because go ever We've been redefine all program really to before do to month, we've time was up work one point one for out. North. we doing, winter south raise the we then the work -- got will spread And split to that find the

But We've that train strict. in because be previous rail our did budget. and caused speed in we in itself tight not under that years a from come fluctuation

So that right the hardening that's of volume need safety, to the provides everything thing do But cost-wise that biggest track [indiscernible] way. one. unit is year that we the number with that safety every the

going carload, you quarter, into train. count. on we you on as X the starts. it What X% better of any to if we really starts -- absorbed locomotives, GTMs, whatever head went to crew to our focuses from something simple X% tonnage the And X. utilization did itself that increasing last TV the to of more without was convert Then as reduced want remember, X.X we And it, call

the of view get Trip increased Optimizer, but quarter. not and use that's a we though. where the slow on by of on efficiency. still to train, over [indiscernible] to that, again, that to strict of be, concerned And want now, start our this the things it's Those acceptable it I'm parameter. as our XX% within -- fuel far We really speed top we an but took they're right really And as moderate there trains,

they're the this mean to all these of figure typical year, the way we of call work numbers quarter, But last on -- we're out better top things the you as blocks. to backdrop the do if comfortable that, actions first So winter, it all want we well. look will did with you you get whether over down excuses. taking. came a That I'm I

you the same our forcing their at times cars. the time, many in don't But that as folks it's just at outlets have move to terminals

working we're And so through that.

In shouldn't opening going closed point where that at reason, this using, were yards in pumps at [indiscernible] to exercise were disconfigured. reduce we right miles, say I there's not talking through cost. up the produces the fact, stuff started it to for identify some the look quite I'm close, but strategic now I'm that got go about as we but that handlings, some more they forward looking a but or will yards we to going speed, we're few all good that as

to your and to grow PSR until you PSR program. you on. And being don't traffic, trains find grow that easily at service start proper margins push put the the your is business. is We the running incrementally could right more some do just providing not speed. and cost to able

cost as it improvement see how has This teach of folks. also -- everywhere for there's in look I operating day. we this on I supervisors, Sean a railway. real lot engagement on. a in going the this what's see see our is our really opportunity every future. the I that's earlier, so of balance, said us to And provided to

this placement to and this our is is labor dwell don't industrial teaching service. customer in we're Obviously, and our XX% major the to is biggest fuel, exercise tackling. go we areas. the one that's the them for arrival customers. many improved how show member what about end of without It's But And at sacrificing

look be to because just and the us that some there liner our and be hope opportunity, under to we're hopefully to we to have. we behind a them saved we at trust this. and what we make out our local next of for incremental business work answers one reason have trust We've to there reduce get the customers I trying increased the opportunities we now some able that with of actually more the [indiscernible] there's we add like us are plan but that on it, of sure taken with next have service. roll, that The money the their is fleets to build

Your comes with question UBS. next Tom from Wadewitz

get to some Wanted thoughts.

and item. of . focused parts. Knight the more I I'm I just But these transport a J.B. ex guess, thinking even some think pricing that got surface and on there's on moving of we've coal and Hunt seen, companies bunch and maintenance you pressure to pricing. weak from there's

I so price. that and car to if good on get of price Is try weakness. And you in sense wanted getting there do a your from headwind what you're this just merchandise, revenue affects some per ongoing to

price model guess, stable? I just, Is going way being and is about price, car. the we think which trying ends per So revenue to better get up it to

from Yes, Tom. truck bottomed improve, We're a I hopefully has will the on we'll think, we're cycle, as we're we of on look market, that, backdrop But and the what seeing. anything really has you side. see changed -- at pricing I don't what inflation, obviously, is, benefits see see do pricing Nothing the able capture and from that a lot side obviously, we tough the here when changing there. to that

It's at more nothing has our balance volume it's changed the -- and opportunities It's gain manage always core We to Again, how there. algorithm growth but accordingly. obviously, work with works. to and our a portfolio as it volume. we and we look whether there's a we price customers, what

benefit where are As pick high, [indiscernible] gets starting that But last that. as planned. from with year, inflation down, like moderate the and will things rates inflation customers had to still hopefully environment that's the comes we going some, forward. today. But not that's the we then to very cost I'm where was hopefully, and that obviously, that

the on I very team the deliver results and think what in I to the first quarter, able right happy with what we're track. was was

with question next Brian Ossenbeck JPMorgan. comes from Your

come to I Sean, guess, headcount. comments back I to on want your So

I on plan. I going the you quarter, for so still that second you a it's in the sounded know into it near at the of can that the said that relatively holds was that rest elaborate bit. year, think little flat like don't if but term, least maybe the

you course, XQ down down employee up new the XQ. sequentially stepped you hit should that just the X.X% And into thinking comp step of as moves in also adjustment. explain And you to agreement that, again that labor and trend? Can we probably be sequentially per the with expected

head on some and helpful. and that that will be thoughts how overall progresses So count additional

Sure, Brian. Yes.

So on year, that the was bit into down that and talked for the -- little I done most a QX to QX. attrition. we of year. count through added sure we work engineering making manage actually that we from going could would that say about head And side, to Mike everything the We're came get this

that we're the going business to As levels. relatively as to second I watch we we sequentially. half. the see If to stable, be the we're fair how But second to We're get to of bit running. going going down we're it's a think half assume to year, get little not

head second see productivity count clear so And going the labor return you're year. half the to in to a half of

the sequentially second little ramped another to first And yes, employee more per quarter QX. benefit One costs. of in second had some QX. is up couple terms we A capital-related then for then And versus has get of employee, in of step a will comp quarter, the quarter versus that as be down programs winter-related QX cost per that. a some reasons secondly,

right, current as wage stipulates you're union year, increase. we a then to agreement get the the of X.X% the And half second labor

that as impact the into go So quarter we'll of the second from half. second we feel

question comes Research. next with Scott from Your Wolfe Group

just QX? QX fuel into but year, in again overall, think positive in from quarter like between from like like you down just we service to So, down year-over-year metrics the right QX, some to just cost, should margins about of QX just sounds look the Mike, QX, QX, and find was QX. how it balance sounds inflecting fuel, OpEx. into now trying overall excluding a you're just maybe it When a we're caustic slightly And

is think full see we given year, improvement? half, is that do some margin much Or could too So we to ask? first that the

safety the the are But on Thank you, going let never over balance all, customer to without you talk to expert about margin. we like theories talk safety. know, Sean margin and as of because Scott. have I I'm right, damaging to go about long way and trying a without here, we're that first your

-- on are all side. on looking we're the that things things these these So at cost focused really

more benefit. useful planning planned more that areas we are. definite I capital into So useful being of yards whether other of we or shift and than the that use to productive cost can by if some hadn't some they these we're see

it's focus to I'll things about is the But Scott that is not Sean. it to something. It's bit But Sean that and on turn that. looking over at, a really, our going up -- start to cost It's like margin he's talking numbers. to side. bring -- the

run do not way. is efficiently. lot strong a maintaining focused what the We're margins it do of can fixed not variable along on and we how growth the Yes. Mike. do adding at more how we incremental opportunities he costs And where whole finding deliver things cost and by Thanks, profile we true. . If says

think, going cost to relatively head I that I made to yes, flat. employee So we And that assume improve fair ex further fuel, got in chance from the to to it's copper a about and ties comments QX. about keeping count with just question your even direct QX

So we'll build some momentum.

QX I more in if Baltimore grown margin a second But even the challenging. it and comps have in quarter. that the maybe impacts, operating with hadn't think it year-over-year little could given are more income the happened, makes it, difficult

we the setup. of half Second year, the about good feel

a on quarters to we're bit into these paid. we're get of The first Kevin headwinds the little year. the continue to projects about, those couple industrial of facing, to start Some the productivity. number of labor going talked grow have that as we later a development And come business. We'll

it. about a like lot there's So to

drive volume gains. to to when guidance what full and helpful, We particularly margin are operating income year very growth. continued clearly, give any sticking mid-single-digit we the total about we're with to revenue growth efficiency is not going can But focused low on do specific growth,

This is Joe.

more add comment. to Just one

from we'll a differently to going best his and our basis, be heard focus on Kevin we and and not have a and bit waned . And help regular mentioned have So hard better tell first the in to the little you customers I the get in our service at customer on work story all. surveys try want just comments, customer we clear, our quarter. But as score, we've forward. had ever

just have dwell and compliance. told isn't and we why the to by That's customer even find we tell introduced other or that velocity to way the some story Plan switch So data things. Trip a

train. For example, our tonnage for went up

we if efficiency is helps but a we that okay higher X, tonnage might a to it. engines on time, X little combination more slower. a maybe dwell go X train, with so our might customer from is be little the engines, being And It tell X happy. customer and It to trains combine the used that and still train in

happy, the And a but a less so -- little And as is little long but as is that velocity we're and more okay. customer dwell better efficiency.

of then backwards, So about we was the with then difference stories some customer and past, tell which opposed later. internal heard you've the customer about distinction. check That's as work important it a we and first in the focus our -- the unique to very and

was importantly, had. best as while our like look of ever our better got efficiency a to But response degraded, saw some survey, the you and customer but may quarter-over-quarter, our we numbers they responses

we're walking line. So that fine

ONE And work a and to to way. efficient. find that, to our at employees working a the together that them with how that CSX we're way you to more going see So have team guys to teach same positive in help time, do as and getting do to

do, And bring teaching. because the and marketing and It's working not sales to and Kevin Mike trying effort. and finding and that's metric. being the listening, balance it's we're creative that appreciate is one worked a solutions collaborative and also his I with life, team And to it's to entire focused operations on it's team

deliver end improvements. the at we And can the of day, sequential

that over sequential as as you deliver long and in customers show we earnings, growth how it improvement time. so our And can to we our leads to

Brandon with question Barclays. from Oglenski comes next Your

pipeline XXX back some can the graphic been 'XX talk next that's where how year? helpful. And the the and works wonder opened if to the you about I in that can guys development have that slide end examples the But facilities somewhat industrial expect that have then is mentioning, the delivering beginning Kevin, already through come into new of you today? of we you in volume

comes And online, mean, I this. the facility ramp, usually in Yes. industry, the to -- XX-month when the And we're XX- early right? depending there's look, stages so on very of a year, on seen this we well example, activity metal look in as as . forward. some aggregate for we in where that side, really as side the for concentration the we've have

But and online, going they growth, related to the them some as the to of come path where place. bring activity once really these market. a see on we as is But take can projects, there's others. You than capacity that that of enter longer guide

So -- we're it. about excited

across color share we lot progresses -- detail how on layers build. that on seeing a lot pipeline to we'll And we it markets diverse around have that think the is and It's diversity serve. to a one around. in board more single I how if a more give in But over would how the the that's as think time. concentrated we year in really you little exciting it more and I give we're that industry. continues not just We're thought

of Ken from Hoexter comes question next America. Bank with Your

to insights. Jim And fun always the over the last Foote also years condolences family, I'll had and my throw with his in XX discussions appreciated

on earlier. So just comment here. Mike, step following the another up

to mid-single-digit low volumes headcount, flat revenues. at and Looking

see And we coal expect down in to the and April? impact stats flow Have down the should then guess week. seen already last volumes do get improve? you I of we about data in that thinking So when the When XX.X% through? service the Baltimore

is How of now of to be the should So metrics? impacting moved volumes what some we maybe Newport Baltimore about the and think percent can results. improve

good. we -- are. thought answer they will quarters good on you and I I earlier. I'm dwell I continue so That's I to expect a the explained velocity much the expect because give here, I yes, when is improved what the few service to an versus -- do the not improve see we -- service almost see Ken. Like Yes, can't question. over to next

going we're some through the to process service of be -- facilities, going right -- now, But effect a to to that's learn trying do stricter fulfilling. place. needs. what is going here the our lot people get level different And customer so that things have it. until in And that's put what again, we to we're to to test put we're But our

speak, I like that's do. thing to we It's our team the around meeting network full is place games full now metrics them of we see improving. team are are have to our operating, than taking Other we engineering still engineering have hearted, a that, not such tester as to but have way -- lots restricted find that we I we But to fluid. see and revolved improving. odd the still have transportation curfews, just continue these the it's

Kevin And are Baltimore shifting the what let we Newport. I'll to doing with talk and about

Yes.

this just necessarily going think we're last choppy and taking with think [indiscernible] is the additional this little on week we're I some terminals the that last of up week, to on to not be week we're at a bit then seeing, with the seeing here capacity. week looking performance some week, I working terms don't some trend in good stepping of that.

I of have impact probably $XX impact, the May, that. improving little offsetting net the all then incident, you when at But X/X million at business, looking if and can more terminals a to glide maybe a get at we're of bit hopefully work we continue look from that to us. we'll through million $XX But path explained end with least the of that June will of Baltimore

next Alliger Sachs. comes with Goldman Jordan from Your question

what really, what on [indiscernible] domestic, little was really growth back sure. is Why is looks a case? talk you not domestic margin. the rate maybe international outstripping by compliance intermodal quarter can in up? versus domestic? seems And based wide like growth plan bit the your curious, maybe the Just a it You that I'm good. And Intermodal gets specifically comments, International

just curious those So dynamics of plans. sort I'm

in the almost board lot out happening in saw we easy the the you some comps first saw fairly pretty last where destocking a year, across That's think, the of were side on Look, obviously, declines dramatic there. quarter. I International companies as

from So we benefited that.

amazing after, good The has the identified from we we We're aligned identifying new job went and an of relationships. areas, partners, right that that profitable some growth benefited other some contract done team with services, that.

able as side, been market international of quarter and seen growth our were domestic domestic obviously past think we it listening trucking was lot in if on put all have I and you've that been our double-digit And companies you've more this context. a -- is results while So truck the the know. competitive, slightly up we're couple pretty to the struggled, we of the last hasn't proud days, up

but and We think context there's better in that results the were a market ahead, challenging sure. good certainly days for

Your next Susquehanna. question comes from Bascome Majors with

competitor Eastern how more, talk term, for the years an at bit start that that industrial has you've outlet desire or your efforts? intention longer maybe rail the use now their chains about helped And really emerging of some of in to some as has of your uncertainty you supply volume customers Can been working a other to development with and uncertainty you another rail short capture at perhaps impacted some term?

Bascome this is Joe.

to culture better will employee service and growth through the CSX which growth ONE employee our with which for certainly As and ONE the the team, our in frame on to get believe time and really mission, really this been to here importantly, improving our focus on I've that focused is profitable and know, we've customers, CSI to customers. lead been experience with we you ourselves

hasn't waned. hasn't That changed and

we on and you've to whole commitment to fact, is industry what the focused and I last that to in out coming our customers service months what commitment think wanting do to seen over that couple grow. of be offer can for

certainly getting we're on So by distracted and by what's distracted it. not going not not

proud is not our we that's can and the what employees. distracted Mike what I'm and for of need getting customers, safety, our staying We and our grow. team, opportunities really as to about on on talked improve to our looking in focused confidence to talked Board, and that. about the sequential on able continue deliver to in you be And quarter do, to improvement focused saw we across We're

want And on. pleased And CSX our the what our we're the and very interactions. consistency hearing we the continuity also focused with messaging, with results, stay from customers, the service what happy but to of and is they're providing, that's they're very

I'm many want have different customers, the industry continue you working At be that. of events, conferences and service that at I'm encouraged together talking seeing and to to an to extensively all at, collaboration more the it to we level, as make that, we're and that. our by do we industry, across higher as better part happen, to are and a about hinted to get

potential so our fluidity need to we the customers. of realize together to And we provide better, of how our this and entire ultimately industry, to service the get the network, all at work

better stakeholders make that take to all this industry help And with us working that's happen. in going the to

when working can get at all if customer and together. better we we So as and grow service industry

focus that's have So CSX. we the at

or you're focusing going plan. the same employees not to our continue -- there's going us X.X, to change thanks. our X.X ONE customers, It's and X.X our see You're and no to execute, on us see CSX,

from with TD comes Jason Seidl question next Cowen. Your

Sort What and last I close how along quantify guess, seen to X back? shifted mainly for operational just Intermodal where percent you pricing now the between those been has over-the-road market? business trucking is able the some side we've operators on the And freight I the huge start shift much over-the-road year, declining to domestic due the back lines, think of to to some to a to things. diesel prices. I price. then issues at guess do Class getting you gap have And Intermodal rails

were add is at trucking I your value a the lot look the prices when do market. at nothing proposition the compelled a would it, than tighter there. there's when get in when bit to little in ago declines more normalized Look, year as about Jason. you and what a And you truck business, absolutely. Thanks, as discussion a not I and in a have think you term. then can you mean is still out option more price look value near to Intermodal Yes. It maybe you're healthier, be

think we solidify, those here. up of the bottom, think year. we're through growth, probably along all put It conversations I we're like as so out balances And And bouncing the feels proud I that. We've pretty that and get at things it as accelerate. domestic

at service be only can lows, recovers. these the imagine even the as the in product is to that compelling how I The market is we're market compelling and offering, that going offering we're

be excited more about going to pretty of to about as handle it anybody actively We're we're that we're So it. a talking than else the comes when back, group it. prepared growth

certain. we're that When happens, that's recovery us. for So exciting not

say trucking pretty I the resilient coming market think it's the challenging very little market. bit to a people very, than but anticipated year, a worse is fair were in we what probably into

next Ben Your comes from question with Nolan Stifel.

I little the was I a about a to bit impact, appreciate the Baltimore million ask to month. going $XX million $XX

the Just business about? we other curious or if on some lines? there impacts to that other impact, coal revenue revenue any predominantly are think line also the cost any below if rerouting in impacts anything from maybe are then ports should other to addition or the that there And of

that impactful coal I'll that seeing not large they're one. to That cover slight we're It's revenue easy. maybe there, the but opportunities, one's some enough be to number.

cost the side, Mike. On

over rough start lot up going most a bit that's The I traffic point of and of out. Newport then. through -- cost alluded to Kevin think had And it, we Yes. the a But now itself really a the more coal. to little not of smoothed moves

So in not sense, that significant no.

we locations a CSX from months coal in what of the in to transfers of of time, trying here. couple needed a change we who had culture asked guys temporarily conductors, you and out put Within be days all little schedule tell because movement were able the our the to want setup just Baltimore, with of for often to achieve engineers to the help for a in relocate the I X I support request are incident ONE the to and the story benefits train our to we're elsewhere. and

And people And to X, willing example. that Xx And seeing sign help. what people how to customers of the and is. dozen that a we're solution here people to immediately be and we needed that's part to are maybe that's just to and great up our a serve a know important a had our is that go, we testament

relocation that temporary of cost of transfer. bit little and a a there's So

we a it oriented, temporary customers. to And you serving those transfers, are And in great people trying what a you, get tell year to service so time, are were this culture picture the the healthy can signed want see. little trying we have many and bigger we to do but a also of I really was people our to up, ago, understand we're But over see signs and struggled. of here

have or the all. And not so at we bottleneck been the constraint

our the proud to he In of done been I with -- team one other fact, work to to customers to coal done testament really we've largest just our our the quickly day was so that's be and a of to and respond and able have Kevin able we've were people. react, and and

That's safely, responding. but just stay focused customers, why another understand efficiently, consistently are people that our that it's to that's culture exist help to do them we so our and and example to it is message of and why people here resonating serve we're and obviously, on important and

do have And to We've a Bay. just that get moving this through. do a able go maintenance load issue, it is in terms point, Curtis -- to we lot would mention there our betterment one of with I been more work Ben, this at under in to and with had able volume been that we've should of

major we've working we fully still pretty accomplish of it able we're on. were some advantage restoration So that taken to that

a thing. So been good that's

question next Deutsche with comes Our Amit Bank. Mehrotra from

thing. clarify one Sean, I quick to just wanted

profits said XQ, first in response question, the if said don't I regarding up. to to you XQ margins up. I think know you

I said catch have it, it. may but You didn't

about clarify And to wanted Kevin, want to by Just interchange. point. just I that then, talk

X between of think Coast total Any that by actually maybe -- I'm split understand is your of kind to what interchange UP? interchange that you unless is represented just half volumes. trying the I actually the mistaken, or interchange evenly do proportion with EP? rails much West I -- you before how -- And So interchange mostly

first part. Yes, margins It's take versus and up Sean. QX QX up. profit I'll the

expectation fair a that's sides. on think both I

a they our when said at very Look, we Western railroad. particularly look certainly, are of another the part business large think I roughly And UP, touches that. half railroads, you of

to a very us. important they're So partner

All of very are partners important. our

business, of that. So signs to and encouraging we're do to more working a collaboratively it's to go lot hearing after

So of we that out lot opportunities a see. there

with Your Markets. comes from Capital RBC Spracklin next question Walter

quarter that When where them want tougher Sean, of and Mike January. that regarding I your operating measures look outlook looking and into to to occurred in first comparing when know from moving the bit your I'm your -- what -- I we rest aren't a some a the unchanged parts of outlook, year, the did prior. at your some the pointed is commentary you of have be. little have

got You've market, a Baltimore worse coal was outage. a there

maintain Trucking you guidance. your but is worse

of maintain to here So despite -- so XXXX? just far bit curious the a what the in kind what here guidance terms puts the if what's little I'm your headwinds are takes as that in those offset to emerged those of are

Walter, do I'll my Yes, best that on one.

a certainly, the outage to And little of winter So then, bit yes, of January, forecast. I the hit things of in a mean, couple course, Baltimore and there. was unexpected, that's

perspective the looks cost an in very revenue a from exercise looks We what second volume about the it where looked particular, and half on feel there's at what like still both like, every item, million, did of and But confident we here $X wins budget of there here, a within across and the we're operations line getting that here business. $X and every dollar every just and million across lot side. small

got And still confidence, do with of got team. revenue the of gap the how I a we've there's all with how performance the So to those, the we close that customer. headwinds, extent backs that CSX sort the deliver ONE on some momentum that economic I think we've lot focused on the the of do everybody from goodwill CSX, of we it's up kind financial think, but

Jefferies. from Moore comes question with Stephanie next Your

have about focus switch and maybe maybe bit it kind to repurchases, capital quarters. your wanted little I couple down a and a on of come gears bit allocation share the little over of seen maybe talk last

I your incremental terms of share repurchases appetite to in So year just the progresses. wanted gauge as

the the ran -- Sean. pretty Stephanie. well in We're quickly. down It's but the still Thanks, first quarter of to repurchase certainly the the step year, a committed dividend. as up we stock share as

opportunistic on buybacks to we do of the we be and gauge based the that momentum so the And amount in try stock.

this recently, more. last be of came a repurchases we've we to bit simply it year. significant with with do cash pullback that bit year, year was than a So the had amount sheet. It buying just will share the little little on into because we're a a less still committed little bit less the balance

still year, you'll debt just and some opportunity in last to the up a raised And but and additional we bit little buybacks, system, that market. we committed incremental we're to it go that, to quarter-to-quarter help based led see have the the on down of and that use very

Shanker Ravi Morgan from comes with question next Stanley. Your

quarters are One ports. follow-up. just the a X here So on Baltimore on

I demand ports redirected Does XX% what East customers think of XQ And in normalization channel that going the any traffic to kind will pent-up hearing be mean from confirm so on on wanted the . And labor you kind there maybe are kind to the ahead East like there's said talks of share is West to far. Just there? your there? Coast innings preparations you XQ of on normalized shift, kind the or of the of of and and late when Coast be Coast you've that. beyond? about also

the that and we've for in plays terms the there's summer incentive volume fourth a be those plan that happened is. miners quarter That's there up they slowdown we'll those that the demand, to of to to I'm [indiscernible] obviously, to lot coal we'll some The how right going things. strong. third sure in and pent-up meet not how out. make the and There contractual Yes. in remain the of prices Look, now, obligations opportunity in but see outages seen. handle with there's Is see that this of

to that not and have Obviously, out coming. Coast, there West demand to going see Coast, you've if in there's to anticipation east East Savanna investments got west. you've moving any billions on the from been trade look, And On we're when lately, tremendous there's huge they to huge, investments. of of visibility demand you're spending -- significant dollars, the the hearing

be and to the East, to to net benefit move Obviously, that us. happened could there if a want they

perspective, in that the So us. the if into neutral be incremental move railroad, our see some cases, business an outcome which a normally would that for that And less you some and move truck it's would I over think our opportunity over probably happened. than could would come ports from come

there, probability the long maybe there opportunities West. of But in So high some more that not East, capacity to I to watch if a don't risk see in happens, we'll over see is but term, lot it. the continue growth and this the a we

comes from Vernon David Your with Bernstein next Research. question

on give guess, the increase? opportunity, the can this D. to you Kevin, J. question just Is more tenfold David Mulan going is from for what I from that Vernon. This team? it us on on driving massive highway increase would coming color is some on XXx of traffic of it bit or your Tuvell, be efforts on in color is an Just a helpful. the more little the back

companies There's their our supply geopolitical out viewed about we consumer, how to have before, and seeing priority, place a of generally, think risk in lot competitive it's being a thinking the most a becoming chains of in And end about lot in investments those -- to of we talked this being consumers valuable but there. supply really post I which chains. network we're your the -- world, there's there's are happen. the and movement a terms pandemic take are as advantages closer supply

a based, So lot it's of mentioned, as activity, think broad I the I draw. but that's major

they costs delivered I to things pandemic, disruption of the think much saw to the get with end lot through consumers. it a how

inbound outbound, it now exciting an So where we pretty opportunity can and us. the for is which the get maybe provides

over happen will it time. So

the ground, the been on capital already of of lot capital a spent. a lot already There's that's

us seen over should in over that of And network, some than see So a in which activity. decades, within the But participate our really last what growth probably industrial base, decaying benefit the rather from base that. it's we've we'll we industrial shift time. or X X in terms

with Partners. next Your question from Vertical Kauffman comes Jeff Research

there using Foote nervousness the with thoughts want terrific all question are family, at questions our back what of other what given to the a being customer among anxiety any well, not but so And point, I guy. customers the base? or types And types to you? customer concerns terms to rails, was go hype, the with maybe and of this of are raised much is an Bascome's He as media on wins, in

I've seen the achieve activity truck us quarters. what our in their few able to files given more performance last Look, terms their been share to up over like, service looks book the to willing with really we've of open chain of the I us supply some customers mean,

So that's exciting for us.

We're really can looking internally deliver. we about what

the path think I they're it. They along path, providing service supportive with certainty the They're want I they we're understand we're of on. customers want that. think and that And and visibility. seeing

had So the see year, many customers for want can last about then And we more we talk service. to "Hey, say, opportunities you.

a opportunity now really backdrop, back. in Those lows. share those as for win of the -- wallet we're And that that growth share. us. is have of now wallet you back. wind right is a come it's lot hard. but turn, markets not of win midst at a translate is discussions, the and the into would will And markets of cyclical And the at and lot working the team are we lot -- the The Clearly, our

focused conversations. lot excited. a I accomplish we're what can incredibly we discussions, those can we on having internally deliver. think what So We're And those of

know Joe months, other It's customers of last have FDA and Kevin in we've events. spent, an -- but the we've don't how a met number I with sorry, I couple and many of had

and of also want reliability I personally. that's think grow of building and gaining said, directly the continuity that's for And purpose. a is to that's to with lot. our starting have customer going the us reliability we you to been want, we're almost Kevin able know to from starting and is the because every them stand We've it. as what and we've consistency, to delivering our and what And deliver point the major trust the and gotten they you're for. of is feedback lot messaging of want touched trust have standing myself us, on seen we've a want actions. And for having us keep what we again, of as customer want constancy foundation constancy on and show, decades customers to which to what They our be to we're trust just and the

going our that from to employees customers better teach to with actions and we -- we engage The course, safety. what ONE do. and Which CSX will we're is, is that come serve do efficiency of our better the

going and And on for us, that in next first stay again you'll so you saw we're it it's delivering it and to course the quarter. quarter, and see

our your that participation. conclude all This does today's will question-and-answer conclude session. for Thank conference. you And

may now disconnect. You