It has been about a month since the last earnings report for Norfolk Southern (NSC Quick QuoteNSC - Free Report) . Shares have lost about 5.8% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Earnings Beat at Norfolk Southern in Q4

Norfolk Southern's  earnings of $3.12 per share surpassed the Zacks Consensus Estimate of $3.04. Moreover, the bottom line improved 18.2% 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 $2,789.9 million. The top line increased 10.8% year over year with all key segments, merchandise, intermodal and coal registering an improvement in revenues. Revenue per unit rose 15% year over year. Total volumes declined 4% year over year due to supply-chain crisis among other factors.

Income from railway operations climbed 15% year over year to $1.1 billion. Railway operating expenses shot up 8% on a year-over-year basis to $1.7 billion, primarily due to higher expenses on fuel and purchased services. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) improved to 60.4% in the fourth quarter from 61.8% in the year-ago quarter owing to higher revenues. With respect to this metric, lower the value, the better.

Segmental Performance

Coal revenues totaled $350 million, up 21% year over year. Coal volumes rose 4%. Revenue per unit jumped 16% in the reported quarter.

Merchandise revenues climbed 8% year over year to $1,671 million. Volumes grew 2% while revenue per unit bumped up 6% year over year.

Intermodal revenues augmented 14% year over year to $831 million. While segmental volumes decreased 7%, revenue per unit ascended 23%.

Liquidity, Dividends & Share Buyback

Norfolk Southern exited 2021 with cash and cash equivalents of $839 million compared with $1,115 million at the end of 2020. Norfolk Southern had long-term debt of $13,287 million at the end of 2021 compared with $12,102 million at December 2020-end.

In 2021, Norfolk Southern paid dividends worth $1,028 million, up 7.1% year over year. NSC repurchased and retired common stock worth $3,390 million in 2021 compared with $1,439 million a year ago.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Norfolk Southern has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Norfolk Southern has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.