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Norfolk Southern (NSC) Q3 Earnings Beat Estimates, Rise Y/Y

Norfolk Southern Corporation’s NSC third-quarter 2019 earnings (excluding 9 cents from non-recurring items) of $2.58 per share surpassed the Zacks Consensus Estimate by a penny. Moreover, the bottom line improved 2.4% on a year-over-year basis owing to lower costs.

Railway operating revenues in the quarter under review came in at $2,841 million, surpassing the Zacks Consensus Estimate of $2,839.1 million. However, the top line declined approximately 4% year over year due to disappointing revenues at the coal and intermodal units. Overall volumes decreased 6%.

The sluggish volumes and the year-over-year revenue fall displeased investors. Consequently, shares of the company were down in early trading.

Income from railway operations declined 2% year over year to $996 million. Operating expenses declined 4% on a year-over-year basis to $1,845 million, primarily owing to lower fuel costs as well as expenses related to purchased services and rents. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) in the third quarter improved 50 basis points to 64.9% in the reported quarter. Notably, lower the value of the metric the better.

Norfolk Southern Corporation Price, Consensus and EPS Surprise

 

Norfolk Southern Corporation Price, Consensus and EPS Surprise

Norfolk Southern Corporation price-consensus-eps-surprise-chart | Norfolk Southern Corporation Quote

Segmental Performance

On a year-over-year basis, coal revenues totaled $403 million, down 13% year over year. Coal volumes contracted 15%. Revenue per unit inched up 2% in the reported quarter.

Merchandise revenues were flat at $1,731 million. Segmental volumes fell 4%. Revenue per unit improved 3% for the segment.

Intermodal revenues decreased 5% year over year to $707 million. Segmental volumes also declined 5%. Revenue per unit was unaltered on a year-over-year basis.

Liquidity

This Zacks Rank #4 (Sell) company exited the third quarter with cash and cash equivalents of $452 million compared with $358 million at the end of 2018. The company had long-term debt of $11,085 million compared with $10,560 million as of Dec 31, 2018.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the Zacks Transportation sector are keenly awaiting third-quarter 2019 earnings reports from key players such as C.H. Robinson Worldwide CHRW , Expeditors EXPD and Air Lease AL. While C.H. Robinson will report third-quarter earnings on Oct 29, Expeditors and Air Lease will announce the same on Nov 5 and 7, respectively.

 

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