Quarterly guidance

Quarterly guidance
No specific numerical quarterly guidance was provided, though management noted expected year-over-year margin improvement above 350 basis points in the fourth quarter alongside normal seasonal cost increases.

Annual guidance

Revenue growth
High single digits, compared to the mid- to high single-digit range provided previously.
Operating margin expansion
More than 350 basis points for the full year.
Capital expenditures
Below $2.4 billion.
Free cash flow growth
More than 80%.

Outlook

Volume and demand
Demand indicators remain good for domestic intermodal, supported by tight trucking capacity and the start of bid season with full double-stack operations on the I-95 corridor through Baltimore.
Cost and expenses
Labor expenses will see a typical sequential increase in the fourth quarter, accompanied by normal seasonal increases in PSMO and weather-related reductions in fuel efficiency.
Productivity initiatives
Management is incorporating a robust pipeline of over 100 sustainable efficiency initiatives into the 2027 budget with clear accountability for results.
Headcount planning
First quarter 2027 headcount will be similar to current levels as employees return from seasonal reductions and conductor training pipelines ramp up.
Coal market conditions
Coal demand appears fairly stable in the near term, with utility burn driven by weather conditions and export volume maintained despite a customer mine's temporary closure.