Things aren't quite clicking for CSX Corp (CSX) this quarter. The railroad operator is dealing with volume growth that's fallen short of expectations, and CFO Kevin Boone just threw another curveball by flagging $40 million in extra costs coming down the track, according to Bank of America Securities.

The Numbers Tell the Story

Analyst Ken Hoexter, who maintains a Buy rating and $41 price target on CSX, noted that the company's quarter-to-date carload growth is trending at just 2.2% year-over-year. That's a pretty significant miss from the earlier 4.6% target, prompting him to revise his full fourth-quarter estimate down to 2.3%.

What's Working and What's Not

The underperformance is concentrated in a few areas. Fertilizers, Autos, and Forest Products are lagging, though Coal has shown some strength. Intermodal is running slightly below expectations but there's a potential bright spot on the horizon.

Hoexter sees Intermodal growth potentially accelerating in the second quarter of 2026, once CSX completes the final phase of its Port Baltimore/Howard Street Tunnel project. The upgraded bridge clearances will enable double-stacking of containers, which should boost capacity and efficiency.

Market Reaction

Shares of CSX declined 0.53% to $36.60 on Wednesday following the news.