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Norfolk Southern (NSC) Q3 Earnings Beat Estimates, Up 22% Y/Y

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Norfolk Southern Corporation’s (NSC - Free Report) third-quarter 2021 earnings of $3.06 per share surpassed the Zacks Consensus Estimate of $2.89. Moreover, the bottom line surged 21.9% year over year despite supply chain disruptions.

Railway operating revenues in the quarter under review came in at $2,852 million, outperforming the Zacks Consensus Estimate of $2,739.6 million. The top line increased 13.8% year over year owing to 14% increase in revenue per unit. Total volumes were flat year over year.

Income from railway operations soared 35% year over year to $1.1 billion. Railway operating expenses increased 3% on a year-over-year basis to $1.7 billion, primarily due to higher fuel, purchased services, and compensation and benefits expenses. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues), on a reported basis, improved to 60.2% in the third quarter from 66.5% in the year-ago quarter. With respect to this metric, lower the value, the better.

Segmental Performance

Coal revenues totaled $330 million, up 32% year over year. Coal volumes rose 9%. Revenue per unit jumped 21% in the reported quarter.

Merchandise revenues climbed 10% year over year to $1,710 million. Volumes increased 5% while revenue per unit inched up 4% year over year.

Intermodal revenues augmented 16% year over year to $812 million while segmental volumes decreased 4%, revenue per unit ascended 22%.

Liquidity & Share Buyback

This Zacks Rank #3 (Hold) company exited the third quarter with cash and cash equivalents of $1,465 million compared with $1,115 million at the end of 2020. The company had long-term debt of $13,274 million at the end of the reported quarter compared with $12,102 million at December 2020-end.

During the first nine months of 2021, the company repurchased and retired 9.4 million shares for $2.5 billion.

Sectorial Snapshots

Let’s take a look at some of the other earnings releases from companies within the Zacks Transportation sector.

CSX Corporation (CSX - Free Report) , carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 earnings of 43 cents per share, surpassing the Zacks Consensus Estimate of 38 cents. Total revenues of $3,292 million outperformed the Zacks Consensus Estimate of $3030.9 million. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Southwest Airlines (LUV - Free Report) , carrying a Zacks Rank #4 (Sell), incurred a loss (excluding 96 cents from non-recurring items) of 23 cents per share in the third quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of 27 cents. Operating revenues of $4,679 million outperformed the Zacks Consensus Estimate of $4,581.5 million.

United Airlines Holdings (UAL - Free Report) , carrying a Zacks Rank #3, incurred a loss (excluding $2.46 from non-recurring items) of $1.02 per share in the third quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.65. Operating revenues of $7,750 million surpassed the Zacks Consensus Estimate of $7639.7 million.