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Post Earnings Coverage as Norfolk Southern's Q4 EPS Rose 18%; Beat Estimates

Upcoming AWS Coverage on Canadian National Railway Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 2, 2017 / Active Wall St. announces its post-earnings coverage on Norfolk Southern Corp. (NYSE: NSC). The Company disclosed its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year fiscal 2016 (FY16) on January 25, 2017. The Norfolk, Virginia-based Company's diluted EPS rose 18% y-o-y; beating market consensus estimates. Register with us now for your free membership at:


One of Norfolk Southern's competitors within the Railroads space, Canadian National Railway Co. (NYSE: CNI), reported on January 24, 2017, its financial and operating results for Q4 and year ended December 31, 2016. AWS will be initiating a research report on Canadian National Railway in the coming days.

Today, AWS is promoting its earnings coverage on NSC; touching on CNI. Get our free coverage by signing up to:



Earnings Reviewed

In Q4 FY16, Norfolk Southern reported total railway operating revenues of $2.49 billion compared to $2.52 billion recorded at the end of Q4 FY15. Revenue numbers for Q4 FY16 marginally lagged behind the market consensus estimates of $2.50 million. The Company attributed this fall in total railway operating revenues to lower merchandise and coal traffic volume as well as reduced fuel surcharges, which was partially offset by intermodal volume growth, thus eclipsing the effects of the 2015 Triple Crown restructuring.

The railroad Company's net income grew to $416 million, or $1.42 per diluted share in Q4 FY16, from $361 million, or $1.20 per diluted share, in Q4 FY15. Wall Street had expected the Company to report net income of $1.38 per diluted share.

For FY16, Norfolk Southern's total railway operating revenues came in at $9.89 billion compared to $10.51 billion in the previous year's same period. The 6% decline in revenues was driven by a 3% volume decline due to reductions in energy-related markets and the Triple Crown restructuring, as well as reduced fuel surcharges. The Company reported net income of $1.67 billion, or $5.62 per diluted share, in FY16 versus $1.56 billion, or $5.10 per diluted share, in FY15.

Operational Metrics

For the reported quarter, the Company's total railway operating expenses were $1.73 billion compared to $1.88 billion in Q4 FY15. The Company's income from railway operations for Q4 FY16 came in at $761 million compared to $642 million in Q4 FY15. Norfolk Southern's operating ratio improved 5.10 points to 69.4% in Q4 FY16 from 74.5% in the year ago same quarter. The railway units grew during Q4 FY16 to 1.84 million from 1.80 million in Q4 FY15. Revenues ton miles (RTM) totaled 48.3 billion in Q4 FY16 compared to 48.1 billion in the prior year's comparable quarter. Furthermore, revenue per thousand RTMs came in at $51.59 versus $52.31 in Q4 FY15.


Norfolk Southern's Merchandise railway operating revenues fell to $1.50 billion in Q4 FY16 from $1.52 billion in Q4 FY15. The segment's railway units also declined in Q4 FY16 to 604.8 thousand from 620.7 thousand in the previous year's corresponding quarter. For Q4 FY16, the segment's RTM was 28.3 billion compared to 28.8 billion in Q4 FY15. Additionally, the segment's revenue per thousand RTMs stood at $53.13 in Q4 FY16 compared to $52.70 in last in Q4 FY15.

Intermodal railway operating revenue rose to $583 million in Q4 FY16 from $563 million in Q4 FY15. The segment's railway units also grew to 996.0 thousand in Q4 FY16 from 934.9 thousand in the prior year's same quarter. In Q4 FY16, the segment's RTM improved to 10.7 billion from 9.8 billion in Q4 FY15. Moreover, the segment's revenue per thousand RTMs came in at $54.56 in Q4 FY16 compared to $57.50 in Q4 FY15.

The Company's coal railway's operating revenue declined to $403 million in Q4 FY16 from $433 million in Q4 FY15. During the reported period, railway units also fell to 239.1 thousand from 247.8 thousand in Q4 FY15. The segment's RTM for Q4 FY16 was 9.3 billion compared to 9.5 billion in Q4 FY15. Furthermore, the segment's revenue per thousand RTMs stood at $43.48 in Q4 FY16 compared to $45.76 in Q4 FY15.

Cash Flow & Balance Sheet

During FY16, net cash provided by operating activities totaled $3.03 billion compared to $2.91 billion in the prior year's same period. At the close of books on December 31, 2016, Norfolk Southern had $956 million as cash and cash equivalents compared to $1.10 billion at the close of books on December 31, 2015. Furthermore, the company reported long-term debt of $9.56 billion as on December 31, 2016, compared to $9.39 billion as on December 31, 2015.

Dividend and Share Repurchase

In a separate press release on January 24, 2017, Norfolk Southern's Board of Directors raised the regular quarterly dividend by 3%, or $0.02 per share, to $0.61 per share. The dividend is payable on March 10, 2017, to stockholders of record at the close of business on February 03, 2017.

In FY16, the Company repurchased and retired 9.2 million of its common stock for $803 million under its 50 million shares stock repurchase program authorized on August 01, 2012 and valid thorough December 31, 2017. Furthermore, the Company has 14.7 million shares remaining to be repurchased under the same authority as on December 31, 2016.

Stock Performance

On Wednesday, the stock closed the trading session at $119.93, jumping 2.10% from its previous closing price of $117.46. A total volume of 2.91 million shares have exchanged hands, which was higher than the 3-month average volume of 2.07 million shares. Norfolk Southern's stock price advanced 10.97% in the last month, 29.79% in the past three months, and 39.40% in the previous six months. Moreover, the stock surged 10.97% since the start of the year. The stock is trading at a PE ratio of 22.21 and has a dividend yield of 2.03%.

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SOURCE: Active Wall Street