Norfolk Southern Corporation ( NSC Quick Quote NSC - Free Report) is scheduled to report second-quarter 2021 results on Jul 28, before market open.
Let’s see how things are shaping up for this earnings season.
Volumes are likely to have been strong in second-quarter 2021 due to improvement in freight conditions in the United States. Notably, the Zacks Consensus Estimate for total carload volumes suggests 6.6% increase sequentially. This anticipated surge in volumes is expected to get reflected in total revenues. The consensus mark for revenues indicates 32% rise from the second-quarter 2020’s reported number.
The Zacks Consensus Estimate for merchandise volumes indicates a 6.7% increase sequentially. The same for merchandise revenues suggests a 6.4% surge from first-quarter 2021’s reported number. The Zacks Consensus Estimate for coal revenues indicates a marginal increase, on a sequential basis.
Benefits from the PSR (precision scheduled railroading) model is likely to get reflected in the operating ratio (operating expenses, as a percentage of revenues). The Zacks Consensus Estimate for operating ratio is pegged at 60%, which suggests an improvement from first-quarter 2021’s reported figure of 62%. Notably, lower the value of the metric the better.
However, increase in fuel costs is likely to have hurt the railroad company’s second-quarter bottom line.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for Norfolk Southern this time around. The combination of a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here . Earnings ESP: Norfolk Southern has an Earnings ESP of -0.16% as the Most Accurate Estimate is pegged at $2.93, lower than the Zacks Consensus Estimate of $2.94. 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 #3. Highlights of Q1 Earnings
Norfolk Southern's first-quarter earnings of $2.66 per share surpassed the Zacks Consensus Estimate of $2.55. Moreover, the bottom line increased 3.1% year over year on lower costs. The company’s railway operating revenues in the quarter under review came in at $2,639 million, outperforming the Zacks Consensus Estimate of $2,613.8 million. The top line inched up approximately 1% year over year owing to 3% rise in volumes.
Stocks to Consider
Investors interested in the broader
Transportation sector may also consider Hawaiian Holdings, Inc. (and HA Quick Quote HA - Free Report) , Canadian Pacific Railway Limited ( CP Quick Quote CP - Free Report) Allegiant Travel Company (. These stocks too possess the right combination of elements to beat on earnings this reporting cycle. ALGT Quick Quote ALGT - Free Report)
Hawaiian Holdings has an Earnings ESP of +2.93% and is Zacks #3 Ranked, presently. The company will release second-quarter 2021 results on Jul 27.
Canadian Pacific has an Earnings ESP of +0.71% and carries a Zacks Rank #3 at present. The company will release second-quarter 2021 results on Jul 28.
Allegiant has an Earnings ESP of +12.39% and is currently a #3 Ranked player. The company will release second-quarter 2021 results on Jul 28.