Back to top

Analyst Blog

Leading U.S. railroad Company Norfolk Southern Corp. (NSC - Analyst Report) reported second quarter 2013 earnings of $1.46 per share, missing the Zacks Consensus Estimate of $1.50. The bottom line fell 8.8% from $1.60 earned in the year-ago quarter.

Total operating revenue was down 2.5% year over year at $2,802 million, which also failed to meet the Zacks Consensus Estimate of $2,842 million. On a year-over-year basis, Coal revenues declined 17.0%, while General Merchandise and Intermodal revenues grew 2% and 4%, respectively.

Operating income was $836 million, down 10% year over year. Operating expenses rose 1.3% year over year to $1,966 million, resulting in an operating ratio of 70.2%.

Cash Position

Norfolk exited the second quarter with cash and cash equivalents of $587 million compared with $356 million in the year-ago quarter. The company had long-term debt of $8,430 million compared with $8,432 million at year-end 2012.


The company increased its quarterly dividend payment by 4% to 52 cents per share. The increased dividend will be paid on Sep 10 to stockholders of record on Aug 2.

Our Analysis

We believe the company is poised to benefit from strong pricing momentum on the back of growing market demand and shortage in truckload transportation. We expect pricing improvements at Norfolk together with productivity gains to push the profitability level higher.

However, we remain concerned about factors such as the prevailing market condition in the core segment like Coal and uncertainties in the present economic environment that would likely affect shipment. Further, tightened railroad regulation and competitive pressure also remain significant headwinds to the company’s growth.

Norfolk, which operates with the likes of Union Pacific Corporation (UNP - Analyst Report), CSX Corp. (CSX - Analyst Report), and Kansas City Southern (KSU - Analyst Report) carries a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%