OptionPundit

Tag: CSX

  • CSX Beats Earnings

    Railroad operator CSX Corp. (CSX 28.39) beat first quarter earnings expectations but saw revenues drop due to the economic downturn. For the first quarter, CSX reported earnings of $0.62 per share, $0.11 better than the First Call consensus of $0.51.

    Revenues fell 17.0% year-over-year to $2.2 billion; the consensus expected $2.26 billion. CSX said the revenue drop off was due to a decline in volumes, driven by significant weakness in industrial production, housing starts, and consumer spending, as well as in the agriculture and energy sectors.

    Shares of CSX are up 6.5% in the pre-market trading. Essentially, with this positive news my bearish put spread will lose all its value. Congrats to those who played conservative and booked profits when it was +20%.

    This is why money management is so important when playing earnings movement related trades. Assuming that all the money is lost, that’s hardly 0.5% to 1% and doesn’t dampen portfolio so much. The idea now is to salvage the trade to recoup whatever maximum possible or convert this into a bullish trade, but I don’t know when it might reverse. The 29 Puts may still have some value.

    Net, booking the loss and moving on.

    Profitable Trading, OP

  • CSX Corporation (CSX) Earnings Play

    Railroad operator CSX Corp. (CSX) is scheduled to issue first-quarter earnings after market close today, with analysts forecasting earnings of $0.51 per share on revenues of $2.26 billion for the quarter. I am not so positive about the results.

    I think CSX might miss earnings’ estimates, but, as I always say earnings are 50:50, pls note surprise element is always there (BNI reported rise); assuming inventories went down, retail sales dipped and broader economy in shatters, they will have less goods to move.

    Those who don’t know about CSX, here is the description from Google finance-

    CSX Corporation (CSX) is a transportation company. The Company operates in two segments: rail and intermodal. The Company’s rail and intermodal businesses provide rail-based transportation services, including traditional rail service and the transport of intermodal containers and trailers. CSX’s principal operating company, CSX Transportation, Inc. (CSXT), provides a link to the transportation supply chain through its approximately 21,000 route mile rail network, which serves centers in 23 states east of the Mississippi River, the District of Columbia, and the Canadian provinces of Ontario and Quebec. In addition to CSXT, the rail segment includes Total Distribution Services, Inc. (TDSI), Transflo Terminal Services, Inc. (Transflo), CSX Technology, Inc. (CSX Technology) and other subsidiaries. CSX Intermodal, Inc. (Intermodal) is a coast-to-coast intermodal transportation provider.

    Net I am bearish, but again, I want to play with very little money..0.5 to 1% only…via either April 29/26 Put vertical debit spread ($1.00-$1.03) or April Put 28/26 Vertical debit spread for about $0.53 to $0.55. Pls note, April option expiration is on Friday, so there is not much time left. If stock moves against, pls be prepared to lose all or have a risk management plan in place.

    Disclaimer– As of this writing, I own the April 29/26 Bear Put Vertical, but I may close it without any prior notice. If you do want to follow this trade, pls do your own due diligence and consult your financial adviser.

    Profitable Trading, OP