Norfolk Southern (NSC) Q2 Earnings Beat, Decline 43% Y/Y
Norfolk Southern Corporation’s NSC second-quarter 2020 earnings of $1.53 per share surpassed the Zacks Consensus Estimate of $1.39. However, the bottom line plunged 43% on a year-over-year basis.
Railway operating revenues in the quarter under review came in at $2,085 million, edging past the Zacks Consensus Estimate of $2,061.5 million. The top line however declined 29% year over year due to 26% drop in total volumes as a result of the economic downturn caused by coronavirus.
Income from railway operations plunged 43% year over year to $610 million. Operating expenses declined 21% on a year-over-year basis to $1,475 million, thanks to low fuel, compensation and benefits, and purchased services expenses. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) in the second quarter deteriorated to 70.7% from 63.6% in the year-ago period. With respect to this metric, lower the value, the better.
Norfolk Southern Corporation Price, Consensus and EPS Surprise
On a year-over-year basis, coal revenues totaled $209 million, down 55% year over year. Coal volumes contracted 57%. However, revenue per unit inched up 3% in the reported quarter.
Merchandise revenues declined 26% to $1,307 million and volumes fell 29%. Revenue per unit improved 5% for the segment.
Intermodal revenues declined 19% year over year to $569 million. Segmental volumes also decreased 16%. Revenue per unit slipped 4% on a year-over-year basis.
Liquidity & Share Buyback
This Zacks Rank #4 (Sell) company exited the second quarter with cash and cash equivalents of $1,143 million compared with $580 million at the end of 2019. The company had long-term debt of $12,612 million at the end of the reported quarter compared with $11,880 million at 2019-end.
During the first six months of 2020, Norfolk Southern repurchased and retired 3.9 million shares at a cost of $669 million.
The company’s board cleared a quarterly cash dividend of 94 cents per share, payable to shareholders on Sep 10 of record as of Aug 7. It paid out dividends for 152 consecutive quarters.
Let’s take a look into some other Zacks Transportation sector companies’ second-quarter earnings.
Canadian National’s CNI second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) were in line with the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year. Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and fell 21.8% year over year. This company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
J.B. Hunt Transport JBHT, carrying a Zacks Rank #3, reported second-quarter earnings of $1.14 per share that surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s KSU second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 company’s total revenues of $547.9 million lagged the consensus mark of $550.2 million.
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