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Norfolk Southern (NSC) Down 7.2% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Norfolk Southern (NSC - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Norfolk Southern due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at Norfolk Southern in Q4
Quarterly earnings of $3.42 per share edged past the Zacks Consensus Estimate of $3.41 per share and improved 9.62% year over year.
Railway operating revenues in the quarter under review came in at $3,237 million, beating the Zacks Consensus Estimate of $3,177.2 million. The top line increased 13.5% year over year, with all key segments, including merchandise, intermodal and coal registering improvement in revenues. Revenue per unit rose 15% year over year, driven by higher fuel surcharges and pricing.
However, total volumes declined 1% year over year due to network challenges. Income from railway operations climbed 5% year over year to $1,181 million.
Railway operating expenses shot up 19% on a year-over-year basis to $2,056 million, primarily due to higher fuel expenses and cost on purchased services. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) deteriorated to 63.5% in the fourth quarter from 60.4% in the year-ago quarter due to higher costs.
In 2022, NSC paid dividends worth $1,167 million. In 2022, the railroad operator repurchased and retired 12.6 million of common stock at a cost of $3.1 billion.
The management announced a 9% increase in the quarterly dividend to $1.35 per share from $1.24. The new dividend is payable on Feb 21 to its shareholders of record on Feb 3.
Segmental Performance
Merchandise’s revenues climbed 12% year over year to $1,876 million. Volumes were flat while revenue per unit ascended 12% year over year.
Intermodal’s revenues augmented 10% year over year to $913 million. While segmental volumes decreased 4%, revenue per unit ascended 14%.
Coal’s revenues totaled $448 million, up 28% year over year. Coal volumes increased 8%. Revenue per unit jumped 19% in the reported quarter.
Liquidity
Norfolk Southern exited the fourth quarter with cash and cash equivalents of $456 million compared with $839 million at the end of 2021. NSC had a long-term debt of $14,479 million at the end of the December quarter compared with $13,287 million at 2021 end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Norfolk Southern has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Norfolk Southern has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Norfolk Southern (NSC) Down 7.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Norfolk Southern (NSC - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Norfolk Southern due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at Norfolk Southern in Q4
Quarterly earnings of $3.42 per share edged past the Zacks Consensus Estimate of $3.41 per share and improved 9.62% year over year.
Railway operating revenues in the quarter under review came in at $3,237 million, beating the Zacks Consensus Estimate of $3,177.2 million. The top line increased 13.5% year over year, with all key segments, including merchandise, intermodal and coal registering improvement in revenues. Revenue per unit rose 15% year over year, driven by higher fuel surcharges and pricing.
However, total volumes declined 1% year over year due to network challenges.
Income from railway operations climbed 5% year over year to $1,181 million.
Railway operating expenses shot up 19% on a year-over-year basis to $2,056 million, primarily due to higher fuel expenses and cost on purchased services. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) deteriorated to 63.5% in the fourth quarter from 60.4% in the year-ago quarter due to higher costs.
In 2022, NSC paid dividends worth $1,167 million. In 2022, the railroad operator repurchased and retired 12.6 million of common stock at a cost of $3.1 billion.
The management announced a 9% increase in the quarterly dividend to $1.35 per share from $1.24. The new dividend is payable on Feb 21 to its shareholders of record on Feb 3.
Segmental Performance
Merchandise’s revenues climbed 12% year over year to $1,876 million. Volumes were flat while revenue per unit ascended 12% year over year.
Intermodal’s revenues augmented 10% year over year to $913 million. While segmental volumes decreased 4%, revenue per unit ascended 14%.
Coal’s revenues totaled $448 million, up 28% year over year. Coal volumes increased 8%. Revenue per unit jumped 19% in the reported quarter.
Liquidity
Norfolk Southern exited the fourth quarter with cash and cash equivalents of $456 million compared with $839 million at the end of 2021. NSC had a long-term debt of $14,479 million at the end of the December quarter compared with $13,287 million at 2021 end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Norfolk Southern has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Norfolk Southern has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.