CSX grew Q2 2026 revenue 10.1% to a record $3.94B, partly from fuel surcharges. Volume rose 6%, non-fuel costs fell and the operating ratio improved to 61.7%, lifting EPS 23% to $0.54.
Revenue
$3.9B
+10.1% YoY
Net income
$1.0B
+20.9% YoY
Diluted EPS
$0.54
+22.7% YoY
Operating margin
38.3%
Overview
CSX, the freight railroad that covers most of the eastern United States, posted its biggest quarterly revenue on record in the second quarter of 2026 (the company's own description): $3,935 million, up 10.1% from a year earlier. Profit grew twice as fast as revenue. Operating income (what's left from revenue after paying to run the railroad, before interest and tax) rose 17.4% to $1,506 million, net income rose 20.9% to $1,002 million, and diluted earnings per share rose 22.7% to $0.54.
Three things drove the quarter:
Higher fuel prices, passed on to customers. The 10-Q says revenue grew "primarily due to increased fuel surcharge revenue together with higher volume and pricing across merchandise, intermodal and coal." A fuel surcharge is an extra charge on freight bills that rises and falls with diesel prices. CSX's own fuel bill rose $177 million (+66%), mainly because of "a 74% increase in locomotive fuel prices." So a large part of the extra revenue went straight back out as fuel cost. It makes revenue look bigger without adding much profit.
More freight. Total volume was 1.676 million units, up 6.1%, with gains in all three main businesses.
Lower non-fuel costs. Total expenses rose $138 million, but excluding fuel they fell $39 million. Savings on outside services, fewer employees and lower depreciation outweighed higher bonus accruals and wage inflation.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$3,935M
$3,574M
+10.1%
Operating income
$1,506M
$1,283M
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Operating ratio, in plain terms: this is the number railroads are usually judged on. It is operating expenses as a share of revenue, i.e. how many cents it costs to earn each dollar. Lower is better. CSX spent about 61.7 cents per dollar of revenue this quarter, down from 64.1 cents a year earlier. It is the mirror image of the 38.3% operating margin.
First half (six months to June 30): revenue $7,417M (+6.0%), operating income $2,759M (+18.7%), operating margin 37.2% vs. 33.2% (operating ratio 62.8% vs. 66.8%), net income $1,809M (+22.6%), diluted EPS $0.97 vs. $0.78 (+24%). First-half total expenses were actually $15 million lower than a year earlier despite higher fuel prices.
Revenue by market
CSX splits its business into three main markets. Merchandise is mixed carload freight such as chemicals, grain, cars and steel. Intermodal is shipping containers and truck trailers carried on trains. Coal is the third. Revenue per unit is the average revenue earned on each carload or container.
Market
Volume (K units)
YoY
Revenue
YoY
Revenue per unit
YoY
Merchandise
695
+4%
$2,446M
+8%
$3,519
+4%
Intermodal
792
+9%
$620M
+26%
$783
+16%
Coal
189
+4%
$520M
+9%
$2,751
+4%
Trucking (Quality Carriers)
n/a
n/a
$226M
+7%
n/a
n/a
Other
n/a
n/a
$123M
−11%
n/a
n/a
Total
1,676
+6%
$3,935M
+10%
$2,348
+4%
Intermodal was the standout. Revenue rose 26% on 9% more containers. The filing says domestic volume grew "due to wins with key customers, new service offerings and a tightening truck environment," while international volume was roughly flat. The 16% jump in revenue per container is far bigger than merchandise's or coal's +4%. The 10-Q doesn't split fuel-surcharge revenue by market, so it doesn't say how much of that jump is fuel pass-through and how much is pricing.
Merchandise rose 8%. Chemicals (+10% revenue; more plastics, waste, petcoke and sand) and metals & equipment (+14%; more pipe and scrap, partly offset by lower steel because of customer plant closures) led the gains. Automotive volume fell 1% because of a temporary outage at a customer plant being re-tooled. Forest products volume was flat: more lumber, offset by less pulp and paper as customer mills closed.
Coal revenue rose 9%. Export metallurgical coal (used in steelmaking) and export thermal coal (burned for power) grew, helped by re-opened mines. Domestic shipments to power plants fell.
Trucking revenue (the Quality Carriers subsidiary) rose $15 million, all from higher fuel surcharges. Other revenue fell $15 million because of an accounting reserve change for freight still in transit.
Where the costs went
Labor and fringe +$40M (+5%). Incentive pay rose $56M "driven by higher expected payouts," and wage inflation added $32M. Lower headcount saved $48M. CSX had about 22,200 employees at quarter-end.
Purchased services and other −$66M (−9%). This line covers outside contractors and other operating costs. It included $54M of efficiency savings net of inflation and $14M less spent on the prior year's network disruptions and rerouting. It also included a $17M gain on selling the company's last remaining aircraft, versus an $8M property-sale gain last year. Two items partly offset these savings: advisory expenses related to "potential industry consolidation" and extra intermodal handling costs. An insurance recovery for 2024 damage on the Blue Ridge line reduced costs.
Depreciation −$16M, following an equipment depreciation study that changed how long assets are assumed to last. This is an accounting change, not a cash saving.
Fuel +$177M. Fuel efficiency improved 4%, to 0.94 gallons per 1,000 gross ton-miles, which only slightly offset the higher price.
The GAAP profit includes a few small one-off items: the aircraft sale gain, the insurance recovery and the depreciation study. Together they are small relative to the $223M rise in operating income. The main drivers of the improvement were volume growth and lower costs outside fuel.
Takeaway: Fuel inflated the 10% revenue growth, because fuel costs are largely passed through to customers. The better measure of improvement is that non-fuel costs fell by $39M while volume rose 6%. That pushed the operating ratio from 64.1% to 61.7%. The weak spot is service: dwell time worsened and the share of carloads delivered on schedule fell from 75% to 71%, which is what management says it must fix in the second half.
Network, service and safety
Operating statistic
Q2 2026
Q2 2025
Change
Train velocity (mph)
18.0
17.5
3% better
Terminal dwell (hours)
11.0
10.4
6% worse
Carload trip plan performance
71%
75%
worse
Intermodal trip plan performance
88%
90%
worse
FRA personal injury frequency index
0.83
1.03
19% better
FRA train accident rate
2.72
3.88
30% better
Trains moved faster between yards, but cars sat longer inside yards ("dwell"). Fewer carloads and containers arrived on their planned schedule ("trip plan performance"). CEO Steve Angel said in the earnings release (8-K Exhibit 99.1) that "as we move into the second half of the year, we will strengthen our service execution." Safety improved on both federal measures.
Blue Ridge subdivision: the mountain line damaged in 2024 reopened in September 2025. Its rebuild explains much of the drop in capital spending: prior-year first-half property additions included about $295 million for the rebuild. Rail capital spending was $561M in Q2 2026, versus $766M a year earlier. This quarter's 10-Q does not mention the Howard Street Tunnel project in Baltimore.
Industry consolidation
The 10-Q says CSX incurred advisory expenses "related to potential industry consolidation" and lists industry consolidation among its risk factors. It gives no further detail and does not name any specific transaction, such as the proposed Union Pacific–Norfolk Southern combination. Readers should not assume from this filing what CSX's role or position is.
Leadership
On May 14, 2026, CSX announced that Stephen Fortune, Executive Vice President and Chief Digital & Technology Officer, had left the company with immediate effect. Steve Watkins, Vice President of Product Management for Rail Operations, took over his duties, reporting to CFO Kevin Boone (8-K filed May 14, 2026). At the May 12 annual meeting all 12 director nominees were re-elected. Director John Zillmer received notably more "against" votes than the others: about 299 million against, versus about 1.12 billion for.
Cash, buybacks and balance sheet
Free cash flow (cash from operations minus capital spending, plus proceeds from property sales) was $1,617M in the first half, versus $444M a year earlier. The filing attributes the increase to three things: last year's one-off payment of $429M in previously postponed taxes, lower capital spending after the Blue Ridge rebuild, and higher earnings.
Buybacks slowed. CSX repurchased 6 million shares for $284M in Q2 (average price $45.30), versus 14 million shares for $401M a year earlier (average $28.28). First-half repurchases were $506M, versus $1,152M. On May 12 the board added $5 billion of new buyback authority, leaving $5.7 billion available at June 30. Diluted share count fell only 0.5%, to 1,859 million, so almost all of the EPS growth came from higher profit rather than fewer shares.
Dividend: $0.14 per share in the quarter ($260M).
Debt and cash: long-term debt totalled $18.9 billion ($17,162M long-term plus $1,702M due within a year). Cash plus short-term investments were $1.39 billion, up from $675M at year-end. CSX issued no new long-term debt in the first half.
Outlook
Neither the 10-Q nor the Q2 earnings release gives a numerical revenue or earnings forecast. The only quantified forward figure in the 10-Q is planned 2026 capital spending of "less than $2.4 billion." With $1,119M spent in the first half, that implies second-half spending of up to about $1.3 billion.
Our read: the cost progress is real. Non-fuel expenses fell while volume grew 6%, and first-half operating ratio improved by 4 points, from 66.8% to 62.8%. The quarter's weaker service metrics are the main risk. If yards stay congested as volume grows, costs such as overtime, rerouting and extra railcars tend to rise again, and customers who switched from trucks, especially in intermodal, are the ones who notice first. The revenue line also depends on diesel prices through the surcharge. If fuel prices fall back, reported revenue growth would slow even if underlying volume and pricing hold up. That makes volume, revenue per unit excluding fuel and the operating ratio better signals than headline revenue. Q3 results are scheduled for October 21, 2026.