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What's in Store for Norfolk Southern (NSC) in Q2 Earnings?
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Norfolk Southern Corporation (NSC - Free Report) is scheduled to report second-quarter 2020 results on Jul 29, before market open.
The Zacks Consensus Estimate for second-quarter earnings have declined 9% to $1.52 per share over the past 60 days. Moreover, it has an impressive earnings history. The company’s earnings have outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missed the same in one). Norfolk Southern has a trailing four-quarter earnings surprise of 6.8%, on average.
Let’s discuss the factors that are likely to have influenced the company’s second-quarter performance.
As witnessed in the first quarter, freight volumes are likely to have been weak in the June-end quarter, impacting the company’s overall performance. Declining shipment volumes stemming from coronavirus-induced issues are likely to get reflected in the company’s second-quarter revenues. Also, supply chain disruptions are expected to have affected Norfolk Southern’s performance in the to-be-reported quarter.
Apart from the coronavirus-related headwind, coal segment weakness due to low natural gas prices and unfavorable weather conditions is also likely to have affected the company’s performance in the June-end quarter.
Intermodal revenues are also expected to have declined due to fall in international volumes from the coronavirus pandemic and excess truck capacity. Moreover, plant shutdowns due to coronavirus are likely to have had put pressure on automotive volumes. The Zacks consensus Estimate for intermodal revenue has declined 9.6% sequentially.
Norfolk Southern Corporation Price and EPS Surprise
Meanwhile, Norfolk Southern’s overall performance in the second quarter is likely to have improved owing to low fuel costs. This, in turn, might have improved the operating ratio (operating expenses as a percentage of revenues) and driven the bottom line too. The Zacks Consensus Estimate for operating ratio improved to 69% from its March-end reported figure. Notably, a lower value of this key metric is desirable.
What Does the Zacks Model Say?
Our proven model does not predict an earnings beat for Norfolk Southern this time around. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Norfolk Southern has an Earnings ESP of -5.00% as the Most Accurate Estimate is pegged at $1.44 per share, lower than the Zacks Consensus Estimate of $1.52. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Norfolk Southern's first-quarter 2020 earnings of $2.58 per share (excluding $1.11 from non-recurring items) surpassed the Zacks Consensus Estimate of $2.19. Moreover, the bottom line inched up 2.8% on a year-over-year basis. Railway operating revenues in the quarter under review came in at $2,625 million, edging past the Zacks Consensus Estimate of $2,558 million. However, the top line declined 7.8% year over year due to an 11% drop in total volumes owing to weak energy prices and the COVID-19 pandemic.
Stocks to Consider
Investors interested in the broader Transportation sector may check out stocks worth considering like Alaska Air Group, Inc. (ALK - Free Report) , Southwest Airlines Co. (LUV - Free Report) and Air Lease Corporation (AL - Free Report) as these also possess the perfect combination to beat on estimates.
Alaska Air has an Earnings ESP of +16.33% and a Zacks Rank #3. This company is set to release second-quarter financial numbers on Jul 23.
Southwest Airlines presently has an Earnings ESP of +19.84% and is a Zacks #3 Ranked player. The company will release second-quarter 2020 results on Jul 23.
Air Lease has an Earnings ESP of +23.32% and is Zacks #3 Ranked at present. The company will release second-quarter 2020 results on Aug 6.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
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What's in Store for Norfolk Southern (NSC) in Q2 Earnings?
Norfolk Southern Corporation (NSC - Free Report) is scheduled to report second-quarter 2020 results on Jul 29, before market open.
The Zacks Consensus Estimate for second-quarter earnings have declined 9% to $1.52 per share over the past 60 days. Moreover, it has an impressive earnings history. The company’s earnings have outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missed the same in one). Norfolk Southern has a trailing four-quarter earnings surprise of 6.8%, on average.
Let’s discuss the factors that are likely to have influenced the company’s second-quarter performance.
As witnessed in the first quarter, freight volumes are likely to have been weak in the June-end quarter, impacting the company’s overall performance. Declining shipment volumes stemming from coronavirus-induced issues are likely to get reflected in the company’s second-quarter revenues. Also, supply chain disruptions are expected to have affected Norfolk Southern’s performance in the to-be-reported quarter.
Apart from the coronavirus-related headwind, coal segment weakness due to low natural gas prices and unfavorable weather conditions is also likely to have affected the company’s performance in the June-end quarter.
Intermodal revenues are also expected to have declined due to fall in international volumes from the coronavirus pandemic and excess truck capacity. Moreover, plant shutdowns due to coronavirus are likely to have had put pressure on automotive volumes. The Zacks consensus Estimate for intermodal revenue has declined 9.6% sequentially.
Norfolk Southern Corporation Price and EPS Surprise
Norfolk Southern Corporation price-eps-surprise | Norfolk Southern Corporation Quote
Meanwhile, Norfolk Southern’s overall performance in the second quarter is likely to have improved owing to low fuel costs. This, in turn, might have improved the operating ratio (operating expenses as a percentage of revenues) and driven the bottom line too. The Zacks Consensus Estimate for operating ratio improved to 69% from its March-end reported figure. Notably, a lower value of this key metric is desirable.
What Does the Zacks Model Say?
Our proven model does not predict an earnings beat for Norfolk Southern this time around. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Norfolk Southern has an Earnings ESP of -5.00% as the Most Accurate Estimate is pegged at $1.44 per share, lower than the Zacks Consensus Estimate of $1.52. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Norfolk Southern carries a Zacks Rank #4 (Sell), currently.
Highlights of Q1 Earnings
Norfolk Southern's first-quarter 2020 earnings of $2.58 per share (excluding $1.11 from non-recurring items) surpassed the Zacks Consensus Estimate of $2.19. Moreover, the bottom line inched up 2.8% on a year-over-year basis. Railway operating revenues in the quarter under review came in at $2,625 million, edging past the Zacks Consensus Estimate of $2,558 million. However, the top line declined 7.8% year over year due to an 11% drop in total volumes owing to weak energy prices and the COVID-19 pandemic.
Stocks to Consider
Investors interested in the broader Transportation sector may check out stocks worth considering like Alaska Air Group, Inc. (ALK - Free Report) , Southwest Airlines Co. (LUV - Free Report) and Air Lease Corporation (AL - Free Report) as these also possess the perfect combination to beat on estimates.
Alaska Air has an Earnings ESP of +16.33% and a Zacks Rank #3. This company is set to release second-quarter financial numbers on Jul 23.
Southwest Airlines presently has an Earnings ESP of +19.84% and is a Zacks #3 Ranked player. The company will release second-quarter 2020 results on Jul 23.
Air Lease has an Earnings ESP of +23.32% and is Zacks #3 Ranked at present. The company will release second-quarter 2020 results on Aug 6.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
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