Jan 22 - CSX CSX.O on Thursday reported fourth-quarter revenue and profit that fell short of market expectations, as weaker industrial demand and lower export coal volumes offset pricing gains and stronger intermodal traffic.

U.S. railroad operators such as CSX have been facing softer industrial activity and uneven freight demand, prompting companies to rein in their costs and adjust operations.

"Our quarterly results reflect the subdued industrial demand environment and actions taken to adjust our cost structure," CEO Steve Angel said, adding that the company will focus on productivity, cost control and capital discipline in 2026.

The Jacksonville, Florida–based company also forecast operating margin expansion of 200 to 300 basis points in 2026 from adjusted 2025 performance, helping shares move 3.2% higher in extended trading.

CSX's operating margin was 31.6% for the quarter, up 30 basis points from a year earlier.

The company posted revenue of $3.50 billion in the fourth quarter, missing analysts' average estimate of $3.54 billion, according to data compiled by LSEG.

Quarterly topline was down 1% from a year earlier, weighed by reduced merchandise volumes and lower export coal revenue.

Its net profit of 39 cents per share was also slightly below expectations of 41 cents.

However, higher pricing in merchandise and intermodal, an increase in intermodal volumes and increased fuel surcharge revenue helped cushion the decline.

Stronger intermodal volumes reflected steadier freight demand and improved network fluidity, while firm merchandise pricing showed CSX's continued ability to pass through rate increases.

(Reporting by Apratim Sarkar; Editing by Shreya Biswas)

((Apratim.Sarkar@thomsonreuters.com;))