U.S. Markets closed

Norfolk Southern's (NSC) Q1 Earnings Beat on Higher Revenues

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Norfolk Southern Corporation’s NSC first-quarter 2022 earnings of $2.93 per share surpassed the Zacks Consensus Estimate of $2.91. Moreover, the bottom line improved 10.2% year over year despite network challenges.

Railway operating revenues in the quarter under review came in at $2,915 million, outperforming the Zacks Consensus Estimate of $2,819.3 million. The top line increased 10.5% year over year, with all key segments — merchandise, intermodal and coal — registering improvement in revenues. Revenue per unit rose 16% year over year. Total volumes declined 5% year over year due to network challenges.

Income from railway operations climbed 7% year over year to $1,085 million. Railway operating expenses shot up 13% on a year-over-year basis to $1,830 million, primarily due to higher expenses on fuel and purchased services. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) deteriorated to 62.8% in the first quarter from 61.5% in the year-ago quarter, owing to higher revenues. With respect to this metric, lower the value, the better.

Norfolk Southern Corporation Price, Consensus and EPS Surprise

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

Coal revenues totaled $389 million, up 25% year over year. Coal volumes dipped 1%. Revenue per unit jumped 25% in the reported quarter.

Merchandise revenues climbed 4% year over year to $1,672 million. Volumes declined 3% while revenue per unit ascended 7% year over year.

Intermodal revenues augmented 19% year over year to $854 million. While segmental volumes decreased 6%, revenue per unit ascended 26%.

Liquidity, Dividends & Share Buyback

Norfolk Southern, carrying a Zacks Rank #3 (Hold), exited the first quarter with cash and cash equivalents of $1,571 million compared with $839 million at the end of 2021. Norfolk Southern had long-term debt of $13,691 million at the end of the first quarter compared with $13,287 million at December 2021-end.

During the first quarter, Norfolk Southern paid dividends worth $297 million, up 19.3% year over year. NSC repurchased and retired common stock worth $600 million in the first quarter compared with $591 million a year ago.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines DAL and J.B. Hunt Transport Services JBHT recently reported first-quarter 2022 results.

Delta, carrying a Zacks Rank #2 (Buy), incurred a loss (excluding 25 cents from non-recurring items) of $1.23 per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of $1.28. With Omicron hampering travel plans in the early part of first-quarter 2022, the carrier incurred a loss after reaping profits in the last two quarters of 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Delta’s first-quarter revenues came in at $9,348 million, which not only beat the Zacks Consensus Estimate of $9,063.5 million, but also soared in excess of 100% from the year-ago figure. The uptick in air-travel demand in the United States can be gauged from the fact that 80.5% of first-quarter 2022 passenger revenues came from domestic markets.

J.B. Hunt, carrying a Zacks Rank #2, reported first-quarter 2022 earnings of $2.29 per share, which surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on higher revenues across all segments.

J.B. Hunt’s first-quarter operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year. Total operating revenues, excluding fuel surcharges, rose 27.4% year over year.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report

Norfolk Southern Corporation (NSC) : Free Stock Analysis Report

J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research