CSX (CSX, Financial), a leading railroad operator, reported Q4 results that met expectations, contrasting with Union Pacific (UNP, Financial), which surpassed Q4 EPS estimates due to cost efficiencies and a robust intermodal business. Intermodal revenue, accounting for about 15% of CSX's total revenue, decreased by 5%, following a 2% decline in the previous quarter, reflecting ongoing softness in domestic trucking prices.

Looking ahead, CSX anticipates moderation in international intermodal volume due to tariff and trade policy uncertainties. The company forecasts low-to-mid single-digit volume growth for FY25, following a modest 2% growth in FY24. In Q4, CSX's volume increased by just 1%.

• The coal market remains a significant challenge for CSX and the railroad industry, with competition from affordable natural gas reducing coal demand. Coal volume dropped by 7%, with further declines expected in FY25 due to facility shutdowns and coal producer issues.
• On a positive note, the agriculture/food, chemicals, and minerals sectors are seeing strong demand. Minerals volume rose by 4% in Q4, while chemicals led with a 6% growth.
• CSX is effectively managing costs, with Labor & Fringe expenses down by 3% to $788 million, driven by lower incentive compensation. Reduced fuel costs also contributed to a 3% year-over-year decrease in overall expenses to $2.4 billion.
• Despite cost savings, Q4 adjusted operating margin declined by 290 basis points quarter-over-quarter to 34.3%, and non-GAAP EPS fell by about 7% to $0.42, as sluggish volume growth and a 3% revenue drop offset the savings.

Overall, CSX's earnings report was lackluster, especially compared to UNP's strong performance. While business conditions remain mixed, CSX's cost control measures are expected to support earnings until coal and intermodal trends improve.