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Norfolk Southern (NSC) Q2 Earnings & Revenues Lag, Rise Y/Y

Zacks Equity Research

Norfolk Southern Corporation NSC reported second-quarter 2019 earnings of $2.7 per share, missing the Zacks Consensus Estimate of $2.77. However, the bottom line improved 8% on a year-over-year basis owing to lower costs.

Railway operating revenues in the quarter under review came in at $2,925 million, lagging the Zacks Consensus Estimate of $2,928.6 million. However, the top line inched up 1% year over year on the back of 5% increase in revenue per unit.

The earnings and revenue miss disappointed investors. Consequently, shares of the company were down in early trading.

Income from railway operations rose 4% year over year to $1,065 million. Operating expenses declined marginally on a year-over-year basis to $1,860 million owing to lower fuel price and expenses related to purchased services and rents. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) in the second quarter improved to 63.6% from 64.6% a year ago. 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 $468 million, up marginally year over year. Coal volumes fell 6%. Revenue per unit increased 7% in the reported quarter.

Merchandise revenues inched up 2.2% year over year to $1,756 million. Merchandise volumes slipped 3%. Revenue per unit climbed 5% for the segment.

Intermodal revenues dipped 1.4% year over year to $701 million. Segmental volumes declined 4%. Revenue per unit was up 2% for the segment.

Liquidity

This Zacks Rank #3 (Hold) company exited the second quarter with cash and cash equivalents of $274 million compared with $358 million at the end of 2018. The company had long-term debt of $11,076 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 broader Transportation sector are keenly awaiting second-quarter earnings reports from key players like Expeditors International of Washington, Inc. EXPD, Air Lease Corporation AL and Hertz Global Holdings, Inc HTZ. While Expeditors and Hertz will report second-quarter earnings numbers on Aug 6, Air Lease will announce the same on Aug 8.

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