What happened
CSX Corp. (NASDAQ: CSX) reported third-quarter 2026 operating income of $1.57 billion and net earnings of $1.05 billion on October 21, 2026. Revenue hit a record $4.02 billion, up 12% from a year earlier. Diluted EPS rose to $0.57 from $0.37.
Total volume rose 5% to 1.69 million units, and intermodal volume increased 7%. Operating margin expanded 880 basis points to 39.1%. The company said revenue rose because of higher fuel surcharge revenue and higher volume and pricing across merchandise, intermodal and coal.
Net earnings rose to $1.05 billion from $694 million. Merchandise revenue rose to $2.45 billion from $2.21 billion, intermodal revenue climbed to $634 million from $527 million, and coal revenue rose to $537 million from $490 million.
Key numbers
| Metric | Latest | Change | Source |
|---|---|---|---|
| Revenue | $4.02 billion | from $3.59 billion, +12% | CSX Quarterly Financial Report |
| Operating income | $1.57 billion | from $1.09 billion, +44% | CSX Quarterly Financial Report |
| Diluted EPS | $0.57 | from $0.37, +54% | CSX Quarterly Financial Report |
| Operating margin | 39.1% | from 30.3%, +880 bps | CSX Quarterly Financial Report |
| Total volume | 1.69 million units | from 1.61 million units, +5% | CSX Quarterly Financial Report |
Read more: CSX (CSX) stock analysis and investment case
Why it matters
OptimistFi's case is that CSX turns a fixed rail network and long-term customer relationships into high cash returns when volumes and pricing hold. This quarter supports that view because revenue rose $430 million from $3.59 billion and operating income rose $483 million from $1.09 billion.
Compared with third-quarter 2025 adjusted results, operating income rose 25%, net earnings rose 29%, and EPS rose 30%. Adjusted third-quarter 2025 operating income was $1.25 billion, adjusted net earnings were $818 million, and adjusted EPS was $0.44.
Fuel surcharge revenue was $466 million, up from $234 million. Intermodal revenue rose 20% to $634 million. Merchandise and coal also increased.
The offset is weaker operating performance. Train velocity fell 2%, dwell increased 12%, and carload and intermodal trip-plan performance both declined year over year. The prior-year quarter also included a non-cash goodwill impairment of $164 million related to Quality Carrier's remaining goodwill.
Through nine months, net cash provided by operating activities was $4.22 billion versus $3.23 billion, and free cash flow before dividends was $2.65 billion versus $1.07 billion. The company also repurchased 11 million shares in the quarter for $543 million at an average cost of $48.75.
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What's next
CSX executives will hold a conference call with the investment community this afternoon, October 21, at 4:30 p.m. Eastern Time. A webcast and presentation materials will be posted on the company's website, and a replay will be archived afterward.
If management says volume and pricing can hold into the fourth quarter, that would support the margin case. Another drop in velocity or trip-plan performance would hurt it.
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Sources
- SEC 8-K press release — CSX Corp. announced third quarter 2026 results on October 21, 2026.
- CSX Quarterly Financial Report — Includes the quarterly income statement, cash flow and operating statistics.
Read the full OptimistFi thesis on CSX Corp.: https://optimistfi.com/stocks/CSX
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The full CSX Corp. investment case, its status and the next test to watch live on the CSX Corp. thesis page.
Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.
