Norfolk Southern Corp Earnings: Five Straight Quarters of Double-Digit Growth

The Cheat Sheet

S&P 500 component Norfolk Southern Corporation reported its results for the fourth quarter. Norfolk Southern is engaged in rail transportation of raw materials, intermediate products, and finished goods.

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

Norfolk Southern Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Norfolk Southern Corporation rose to $480 million ($1.42 per share) vs. $402 million ($1.09 per share) in the same quarter a year earlier. This marks a rise of 19.4% from the year earlier quarter.

Revenue: Rose 16.9% to $2.8 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: NSC beat the mean analyst estimate of $1.40 per share. Analysts were expecting revenue of $2.83 billion.

Quoting Management: “Norfolk Southern achieved all-time records for revenues, operating income, net income, and earnings per share during 2011, and set fourth-quarter records for revenues, net income, and earnings per share,” said Norfolk Southern CEO Wick Moorman. “In 2012 we will remain committed to enhancing our service product, maintaining the safety and quality of our rail network, improving operational efficiency, and supporting growth. Our strong capital program of $2.4 billion will include substantial investments along our Crescent Corridor, a public-private partnership to create a high-capacity, truck-competitive intermodal freight rail route between the Gulf Coast and Northeast.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 16.6%, with the biggest boost coming in the second quarter when revenue rose 17.9% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 24.5% and in the second quarter, the figure rose 42.1%.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 18 cents in the third quarter and by 9 cents in the second quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved up from $1.19 a share to $1.22 over the last ninety days. For the fiscal year, the average estimate has moved up from $5.11 a share to $5.36 over the last ninety days.

Competitors to Watch: CSX Corporation , Kansas City Southern , Union Pacific Corporation , Burlington Northern Santa Fe, LLC (BNI), Providence & Worcester Railroad Co. , Canadian National Railway , Canadian Pacific Railway Ltd. , Genesee & Wyoming Inc. and RailAmerica, Inc. .

Stock Performance: Shares of NSC were down 0.6% from the previous close.

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

View Comments (0)