Leading U.S. railroad company,
Norfolk Southern Corp.
) reported third quarter 2013 earnings of $1.53 per share,
handily beating the Zacks Consensus Estimate of $1.39. The bottom
line rose 23.4% from $1.24 earned in the year-ago quarter.
Strong performance by the company's chemical, metal and
construction, intermodal and automobile business coupled with
higher productivity led to the impressive showing. Shareholders
reacted positively to the news as the stock price gained 6.77% in
Wednesday trade on Nasdaq.
Total operating revenue was up 4.9% year over year at $2,824
million, which also beat the Zacks Consensus Estimate of $2,769
Operating income was $849 million, up 16.1% year over year.
Operating expenses increased 8.0% year over year to $1,975
million, resulting in an operating ratio of 69.9%.
On a year-over-year basis,
revenues declined 8.6% to $641 million owing to lower average
revenue per unit and a 2% decline in volumes.
revenues grew 10.7% year over year to $1,578 million on 6% growth
revenues grew 6.7% year over year to $605 million owing to 5%
Norfolk exited the third quarter with cash and cash
equivalents of $984 million compared with $653 million at the end
of 2012. The company had long-term debt of $8,499 million
compared with $8,432 million at year-end 2012.
We believe Norfolk is poised to benefit from strong pricing
momentum on the back of abundant opportunities within the
transportation business sector. Growing market share of its
Intermodal segment and an improving Merchandize segment coupled
with recovery in the construction and agriculture market will
likely support the company's efforts to generate better revenues
in the coming quarters.
However, we remain concerned about the lackluster performance
of the Coal segment. Further, tightened railroad regulation and
competitive pressure also remain significant headwinds to the
Norfolk, which operates with the likes of
Union Pacific Corporation
Kansas City Southern
), carries a Zacks Rank #3 (Hold).
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