0001628280-26-027051
SEC filingRevenue grew slightly, but profitability declined sharply due to higher costs and lower operating cash flow.
Revenue for the first quarter of 2026 was $3.0 billion, a 16.7% increase compared to $3.0 billion in the prior year. The growth was driven by higher merchandise and coal volumes, which offset declines in intermodal. Coal revenues decreased due to lower average revenue per unit from reduced pricing and adverse mix, despite higher volumes. Intermodal revenues also declined on lower volume, partially offset by higher average revenue per unit from increased pricing.
Operating income decreased 23.5% to $877 million, compared to $1.1 billion in the prior year. The decline was primarily due to higher fuel expense, driven by increased locomotive fuel prices, and higher equipment rents, which rose due to higher automotive equipment expenses and lower earnings from the TTX investment. Net income fell 27.1% to $547 million, and diluted earnings per share decreased 26.6% to $2.43.
Net cash provided by operating activities was $344 million, down from $950 million in the prior year, reflecting higher cash outflows. Capital expenditures totaled $382 million, resulting in negative free cash flow of $38 million. The company expects cash on hand combined with operating cash flows to be sufficient to meet ongoing obligations.
Fuel surcharge revenues for the remainder of the year are expected to increase based on current fuel commodity prices. The company continues to focus on operational efficiency and cost management to navigate the current environment.