Norfolk Southern Corporation (NYSE:NSC)’s NSC chairman and CEO, James A. Squires, is set to retire on May 1, 2022. Squires will be succeeded by executive vice president and chief marketing officer (“CMO”) Alan H. Shaw. Following this news, shares of the company gained 3.6% at the close of business on Dec 2.
Squires, under his tenure, increased shareholder value by more than $30 billion and implemented the precision scheduled railroading (“PSR”) model, an operating structure which reduces costs and leads to optimal utilization of assets. Amid coronavirus-led volume softness, substantial reduction in costs, thanks to the PSR model, supported Norfolk Southern’s bottom line last year. Despite coronavirus-related adversities, the company continued to reward its shareholders. In 2020, NSC returned $2,399 million to shareholders through a combination of dividends ($960 million) and share buybacks ($1,439 million).
Under Squires’ tenure, Norfolk Southern made a quick turnaround in the second half of 2020, capitalizing on the recovery in freight volumes as countries reopened after months of lockdown.
Regarding his successor, Squires said, "Alan has a unique combination of skills and experience that prepare him to lead the company." "He's a veteran railroader who understands operations and will drive continued improvement in service and efficiency”, added Squires.
Shaw has 27 years of experience at Norfolk Southern in various roles in marketing, operations, and finance. He was appointed as CMO in May 2015. Under him, NSC “built the strongest intermodal franchise in the eastern United States” aiming for growth in consumer-oriented, service-sensitive markets.
In order to ensure a smooth transition, Squires and Shaw will continue working together in the next five months. As part of the transition process, Norfolk Southern’s board has elected Shaw as president, effective immediately. Following this change, NSC’s executive leadership team is set to report to Shaw.
Zacks Rank & Key Picks
Norfolk Southern carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the broader Transportation sector are as follows:
Schneider National (NYSE:SNDR) SNDR sports a Zacks Rank #1 (Strong Buy). The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 21%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Schneider National have rallied more than 18% so far this year.
Expeditors International (NASDAQ:EXPD) of Washington EXPD also sports a Zacks Rank #1. The company’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 29.1%.
Shares of Expeditors have appreciated nearly 30% so far this year.
Landstar System (NASDAQ:LSTR) LSTR carries a Zacks Rank #2 (Buy). The company’s earnings have trumped the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 11.4%.
Shares of Landstar have gained more than 26% so far this year.
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Norfolk Southern Corporation (NSC): Free Stock Analysis Report
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