Norfolk Southern Corporation’s (NYSE:NSC) third-quarter 2019 earnings (excluding 9 cents from non-recurring items) of $2.58 per share surpassed the Zacks Consensus Estimate by a penny. Moreover, the bottom line improved 2.4% on a year-over-year basis owing to lower costs.
Railway operating revenues in the quarter under review came in at $2,841 million, surpassing the Zacks Consensus Estimate of $2,839.1 million. However, the top line declined approximately 4% year over year due to disappointing revenues at the coal and intermodal units. Overall volumes decreased 6%.
The sluggish volumes and the year-over-year revenue fall displeased investors. Consequently, shares of the company were down in early trading.
Income from railway operations declined 2% year over year to $996 million. Operating expenses declined 4% on a year-over-year basis to $1,845 million, primarily owing to lower fuel costs as well as expenses related to purchased services and rents. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) in the third quarter improved 50 basis points to 64.9% in the reported quarter. Notably, lower the value of the metric the better.
Norfolk Southern Corporation Price, Consensus and EPS Surprise
Norfolk Southern Corporation price-consensus-eps-surprise-chart | Norfolk Southern Corporation Quote
Segmental Performance
On a year-over-year basis, coal revenues totaled $403 million, down 13% year over year. Coal volumes contracted 15%. Revenue per unit inched up 2% in the reported quarter.
Merchandise revenues were flat at $1,731 million. Segmental volumes fell 4%. Revenue per unit improved 3% for the segment.
Intermodal revenues decreased 5% year over year to $707 million. Segmental volumes also declined 5%. Revenue per unit was unaltered on a year-over-year basis.
Liquidity
This Zacks Rank #4 (Sell) company exited the third quarter with cash and cash equivalents of $452 million compared with $358 million at the end of 2018. The company had long-term debt of $11,085 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 Zacks Transportation sector are keenly awaiting third-quarter 2019 earnings reports from key players such as C.H. Robinson Worldwide (NASDAQ:CHRW) , Expeditors (NASDAQ:EXPD) and Air Lease (NYSE:AL) . While C.H. Robinson will report third-quarter earnings on Oct 29, Expeditors and Air Lease will announce the same on Nov 5 and 7, respectively.
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Air Lease Corporation (AL): Free Stock Analysis Report
Norfolk Southern Corporation (NSC): Free Stock Analysis Report
Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report
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