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

Norfolk Southern Corporation (NYSE: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.

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. (NASDAQ:EXPD) , Air Lease Corporation (NYSE:AL) and Hertz Global Holdings, Inc (NYSE: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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