Will the Baltimore Bridge collapse weigh on CSX's earnings?

By James Rogers

Railroad operator CSX reports first-quarter results after market close Wednesday

Railroad operator CSX Corp. reports first-quarter results after market close Wednesday, as shockwaves from last month's collapse of the Francis Scott Key Bridge in Baltimore are still reverberating through the rail industry.

CSX (CSX) has been described as the most affected by the Baltimore bridge collapse among major North American railroad operators, although Anthony DeRuijter, an analyst at research firm Third Bridge, thinks this could be off the mark.

"The disruption at the Port of Baltimore due to the Francis Scott Key Bridge collapse is unlikely to have meaningfully hit volumes for CSX in that region," he said, in a statement. "The biggest vulnerability for CSX there is coal, and our experts think it is 'near impossible' to substitute rail for truck in coal transportation."

Related: This railroad operator is most impacted by the Baltimore bridge collapse

"Our experts also expect a slight Q2 pick up / recovery in run-rate volumes, which will then continue to recover on stronger automotive volumes and cross-border business," DeRuijter added. "Near-shoring could be a significant short-to-medium term growth driver for CSX, which is better positioned than peer Norfolk Southern for volume growth out of Mexico due to its interchange with CPKC."

Nearshoring, the opposite of offshoring, is a trend whereby companies move production closer to customers with the goal of reducing costs.

Last year CSX, Canadian Pacific Kansas City Ltd. (CA:CP) and Genesee & Wyoming Inc. announced a deal to create a new direct CPKC-CSX interchange connection in Alabama linking Mexico, Texas and the U.S. southeast.

Related: Norfolk Southern's revenue will take a Baltimore bridge hit. This is what it means for CSX.

Earlier this month CSX rival Norfolk Southern Corp. (NSC) said that the company's second-quarter revenue will be impacted by the bridge's collapse.

Analysts surveyed by FactSet are looking for CSX to report earnings of 45 cents a share and sales of $3.664 billion. Of 29 analysts surveyed by FactSet, 20 have an overweight or buy rating, eight have a hold rating and one has an underweight rating for CSX.

CSX shares, which have fallen 1% in 2024, are down 1.5% Wednesday. Norfolk Southern shares have gained 1.6% this year and are down 1.1% Wednesday.

-James Rogers

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04-17-24 1303ET

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