As for earnings growth, EPS was nicked 6 cents as "weather" increased expenses and constrained revs by 2 to 3 cents per share...leaving CSX to report about 20% below their expect earnings:
CSX’ first-quarter operating earnings declined 16% even though the rail improved overall volume 3%, and the operating ratio fell 520 basis points, to 75.5% due in large part to winter storms. All the rails, indeed, all transports, faced bitter, debilitating conditions this year. FedEx CEO Fred Smith called this the toughest winter in which his firm has ever operated, but we consider weather to be a regular variable in this outdoor enterprise, and are not concerned with one quarter’s worth of costs to thaw switches, clear tracks, and run shorter trains. We maintain our wide economic moat rating and our fair value estimate.
...management expects modest full-year earnings growth in 2014 due to strong merchandise and intermodal, and even improving domestic coal. A bit further forward, management expects to delivery double-digit growth in 2015 and beyond, and to sustain a mid-60% operating ratio (OR) long term.
CSX estimates weather increased expenses $0.06 per share and constrained revenue by $0.02-$0.03 per share, thus the reported $0.40 EPS would have been $0.08-$0.09 higher were it not for the harsh conditions...on-time originations and arrivals slid from 91% and 85% in the year-ago period to 63% and 51%, respectively. Offsetting this, a lower tax rate in Indiana benefited the quarter by $0.02 per share.
PC market headwinds weighed on Intel's PC processor business during the year, but were mostly offset by growth in the server processor segment...this trend will continue in 2014, resulting in flat sales for the year:
Intel has seen some recent headwinds, namely from a maturing PC market and the emergence of a new competitor in ARM, whose processor designs populate most smartphones and tablets. The line between PCs and mobile devices has been blurring, with ARM attempting to move upstream while Intel tries to extend its presence downstream with its Atom chips that are aimed at mobile devices. The emergence of the tablet has provided a battleground for the two, and ARM has been much more successful so far. There is evidence that ARM-based tablets are cannibalizing PC sales, which in turn has somewhat pressured Intel's computer processor sales. However, we believe ARM's threat to Intel has been overblown. ARM has been successful in chips for mobile devices and tablets because of the low power consumption of its designs, something that Intel has been unable to match despite being able to offer higher processor performance. Nonetheless, the Atom processors are becoming much more competitive in power efficiency, with early indications that the new Silvermont version of Atom has substantially narrowed the gap with ARM.