CSX Corporation (CSX – Analyst Report) recently warned about 2016 as the railroads struggle. This Zacks Rank #5 (Strong Sell) is expected to see earnings decline this year.

CSX connects nearly every major metropolitan area in the eastern United States by rail and links 240 short-line railroads and 70 ocean, river and lake ports in its network.

It customers are in diverse industries, including energy, industrials, construction, agriculture and consumer products.

Beat Again In the Fourth Quarter But…

On Jan 12, CSX beat the Zacks Consensus Estimate by 2 cents. Earnings were $0.48 compared to the Consensus of $0.46.

It was the 8th straight beat for the company.

However, fourth quarter revenue fell by 13% despite lower fuel costs as volumes declined 6%. It saw growth in intermodal, automotive and minerals but that couldn’t offset the significant declines in coal. The strong US dollar is also challenging the market.

2016 Guidance Was Weak

CSX sees the current negative market trends continuing in 2016. As a result, it guided 2016 earnings below 2015.

In response, the analysts cut their estimates for 2016.

10 estimates were lowered after the earnings report, pushing the 2016 Zacks Consensus Estimate down to $1.87 from $2.11 just 90 days before.

That is an earnings decline of 6.6% compared to 2015 where the company made $2.00 per share.

Shares Plunge as Commodities Continue to Decline

The railroad stocks seem to be moving in tandem with the price of oil. As it declines so do the stocks.

CSX shares are down 15% year to date, after being weak in 2015. Check out the 2-year chart. It isn’t pretty.

CSX now trades at a forward P/E of just 12.3, which is historically cheap.

With the stock sell off, the dividend yield has also risen to 3.2%.

But investors will likely have to hold awhile for this to turn around. Those estimate cuts are signaling a tough time in 2016.

If you really must by a transportation stock right now, and have a short time horizon, stay clear from the railroads. You might want to consider one of the airlines instead.