NEW YORK (TheStreet) -- CSX Corp. (CSX - Get Report) expects first quarter earnings to "decline significantly" as coal headwinds and the strong dollar are likely to dampen the railroad operator's volumes.
While the company did not give specific details on earnings projections, analysts are anticipating earnings to drop by 18% to 37 cents a share in the current quarter, the Wall Street Journal reports.
Overall, low global commodity prices will hurt results. Coal volume is projected to decline over 20% in 2016.
Despite these challenges, CSX continues to target $200 million in productivity savings this year.
"As we look toward a future with significantly less coal, our strategy includes rationalizing and realigning the network to match decreased demand in some markets and adjust to increases in others, investing in clearance and terminal projects to leverage intermodal growth, and optimizing technology to serve the CSX of tomorrow as we continue to target a mid-60s operating ratio longer term," CFO Frank Lonegro stated.
Shares are climbing 0.93% to $24.99 on Wednesday.
Separately, TheStreet Ratings currently has a "Buy" rating on the stock with a letter grade of B-.
The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: CSX\CSX data by YCharts