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Norfolk Southern's (NSC) Q4 Earnings Beat on Volume Growth

Zacks Equity Research

Norfolk Southern Corporation NSC delivered fourth-quarter 2018 earnings of $2.57 per share, surpassing the Zacks Consensus Estimate of $2.30. The bottom line also soared 52.1% on a year-over-year basis.

Railway operating revenues in the quarter under review grossed $2,896 million, higher than the Zacks Consensus Estimate of $2,845.1 million. Moreover, the top line rose 8.5% year over year owing to higher fuel-surcharge revenues and robust volumes among other factors. Overall, volumes expanded 3% on the back of growth in intermodal and coal segments.

Income from railway operations augmented 8% year over year to $1.1 billion. Operating expenses increased 9% year over year to $1.8 billion. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) in the fourth quarter came in at 62.8% compared with 62% in the fourth quarter of 2017. The same for 2018 stood at 65.4% compared with 67.4% in 2017.

Norfolk Southern Corporation Price, Consensus and EPS Surprise

 

Norfolk Southern Corporation Price, Consensus and EPS Surprise | Norfolk Southern Corporation Quote


Segmental Revenues

On a year-over-year basis, coal revenues climbed 7.3% to $457 million. Coal volumes inched up 1%.

Merchandise revenues gained 6.8% year over year to $1,684 million. Merchandise volumes are flat year over year.

Intermodal revenues rose 13.2% year over year to $755 million. Intermodal volumes also improved year over year.

Liquidity

This Zacks Rank #3 (Hold) company exited the fourth quarter with cash and cash equivalents of $358 million compared with $690 million at the end of 2017. The company had long-term debt of $10,560 million compared with $9,136 million as of Dec 31, 2017. 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 fourth-quarter earnings reports from key players, such as SkyWest, Inc. SKYW, C.H. Robinson Worldwide, Inc. CHRW and United Parcel Service, Inc. UPS. While SkyWest and UPS will report fourth-quarter earnings on Jan 31, C.H. Robinson will release the same on Jan 29.

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