Three transportation companies reported earnings on the same day this week: railroad firm CSX Corporation (NASDAQ:CSX), trucking company Knight-Swift Transportation Holdings Inc. (NYSE:KNX), and Southwest Airlines Co. (NYSE:LUV). All three are dealing with the same problem: fuel costs that shot up after the Iran war began. However, their results turned out very differently, and that difference says a lot about where each industry stands right now.
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CSX Corporation (NASDAQ:CSX): Steady Demand Wins Out
CSX beat expectations easily. Revenue rose 10% to $3.94 billion, above the $3.89 billion analysts expected, and profit came in at $1 billion, or 54 cents a share, up from 44 cents a year earlier. The firm made 17% more money from its operations, and it did this even though fuel costs rose to $446 million from $269 million a year ago. The growth came from intermodal shipments, freight that moves by rail, truck, and ship without being unloaded along the way. That kind of shipping stayed strong because people are still spending money, even though coal shipments and some parts of heavy industry stayed weak. CSX Corporation (NASDAQ:CSX) raised what it expects to earn for the rest of the year. CEO Steve Angel said the railroad handled a big jump in shipments while still staying focused on safety.
Knight-Swift Transportation Holdings Inc. (NYSE:KNX): The Trucking Market Is Finally Turning Around
Knight-Swift’s numbers were even better, and the reason behind them matters more than the numbers themselves. Adjusted earnings came in at 63 cents per share, up 80% from 35 cents a year earlier, on revenue of $2.1 billion, up nearly 13%. CEO Adam Miller said trucking companies suddenly have fewer trucks available for the freight that needs to move, which is pushing up prices. When shippers try to book a truck, they’re getting turned down more often, a sign that trucks are in short supply. Knight-Swift Transportation Holdings Inc. (NYSE:KNX) said it’s getting turned down even less than other trucking companies, meaning it’s winning more of that business than its rivals. Its intermodal shipping business also grew a lot and came close to breaking even for the first time in a while. The company expects an even better third quarter.
Southwest Airlines Co. (NYSE:LUV): Fuel Costs Are Still Winning
Southwest’s main number looked great at first. Adjusted earnings came in at 94 cents per share, almost double the 51 cents analysts expected. Revenue grew 16.4% to $8.43 billion. However, that revenue number actually missed what analysts expected, and the earnings beat came with a catch: part of it came from a one-time accounting change, not from the business getting stronger. Southwest changed how it counts money from flight credits that expire unused, and that boosted this quarter’s numbers. Look past the good headline number, and the real story is that fuel costs are still beating Southwest.
Its fuel bill jumped 67% to $2.22 billion, which alone cut its earnings by $1.17 per share. Because of this, Southwest had to lower how much money it expects to make for the rest of the year, from “at least $4 per share” down to a range of $3.25 to $4.25. It also gave a weak forecast for the current quarter, well below what Wall Street expected. Southwest is now flying fewer new routes than planned and even removing some seats from planes to add legroom it can charge extra for. Southwest Airlines Co. (NYSE:LUV)’s finance chief, Tom Doxey, told CNBC that demand from travelers “remains really strong,” and ticket prices are up almost 21% from last year. But the fuel bill is still growing faster than the extra money coming in from higher fares.
That raises a real question. Did one of these companies just do a better job than the others? Or are all three simply caught up in bigger trends that are helping some businesses and hurting others?
Two Industries, Two Different Stories
There’s a strong case that this is about bigger trends, not just which company did better. CSX Corporation (NASDAQ:CSX)’s growth came from steady shipping demand tied to how much people are spending overall, not something CSX created on its own. Knight-Swift’s whole quarter was driven by trucks becoming harder to find across the entire industry, and that’s not something unique to Knight-Swift Transportation Holdings Inc. (NYSE:KNX) either. Both firms are benefiting from real shifts happening across their whole industries, not just from beating weaker competitors.
Southwest Airlines Co. (NYSE:LUV)’s story points a different way. Its fuel cost problem isn’t unique either, and every airline is dealing with the same higher fuel prices from the Iran war. But Southwest has spent years trying to bring in more money; it stopped letting everyone pick their own seat for free, added a cheaper “basic” ticket option, and started charging for bags. Even with all that effort, it still isn’t making enough extra money to fully cover its higher fuel costs. This is a case where a firm is trying hard to fix its own problem, but a bigger, industry-wide cost is still winning.
Insider Monkey’s Hedge Fund Data Analysis
Insider Monkey’s hedge fund database shows a big difference in how much big investors trust each of these three companies. CSX was owned by 65 hedge funds at the end of Q1 2026, down from 70 the quarter before, worth $3.7 billion total. For those funds, CSX makes up about 4.8% of their average portfolio. Southwest was owned by 54 funds, up from 47, worth $2.2 billion, but it makes up 11.7% of the average holder’s portfolio, a surprisingly large bet on a stock whose own outlook just got worse. Knight-Swift Transportation Holdings Inc. (NYSE:KNX) stood out the most. It was owned by 53 funds, way up from 38 the quarter before, worth $1.8 billion, and making up 19.6% of the average holder’s portfolio, by far the biggest vote of confidence of the three. Hedge funds were already buying into Knight-Swift before these results came out, and the results show why.
Conclusion
CSX Corporation (NASDAQ:CSX) and Knight-Swift both had good quarters for a similar reason: their industries are genuinely getting better right now. For CSX, it’s steady shipping demand. For Knight-Swift, it’s a trucking market where trucks are finally becoming harder to find, which pushes prices up. Southwest Airlines Co. (NYSE:LUV) had a good quarter in one way and a worrying one in another way. Its fuel costs are still growing faster than the extra money it’s bringing in, and its lower guidance shows the company doesn’t expect that to change soon. If fuel prices stay high, rail and trucking companies look better positioned to keep benefiting than airlines do.
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