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Why Is Norfolk Southern (NSC) Down 2.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Norfolk Southern (NSC - Free Report) . Shares have lost about 2.4% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Norfolk Southern due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Norfolk Southern Corporation before we dive into how investors and analysts have reacted as of late.
Earnings Beat at Norfolk Southern in Q2
NSC's second-quarter 2025 earnings (excluding 12 cents from non-recurring items) of $3.29 per share beat the Zacks Consensus Estimate of $3.27 and increased 7.5% year over year, owing to lower costs.
Railway operating revenues were $3.11 billion in the quarter under review, missing the Zacks Consensus Estimate of $3.13 billion. The top line increased 2.2% year over year, driven by the 3% rise in overall volumes. Total revenue per unit dipped 1% year over year. Income from railway operations rose 4% year over year to $1.17 billion. Railway operating expenses inched up 1% on a year-over-year basis to $1.9 billion, primarily due to a double-digit increase in expenses on minerals and other items.
Q2 Segmental Performance
Merchandise revenues increased 4% year over year to $2 billion. Revenue per unit decreased 1% year over year.
Intermodal’s revenues were flat year over year at $743 million. While segmental volumes increased 1%, revenue per unit inched down 1% year over year.
Coal revenues were $395 million, down 1% year over year. Coal volumes increased 12% year over year. Revenue per unit declined 11% in the reported quarter.
Liquidity
Norfolk Southern, currently carrying a Zacks Rank#4 (Sell), exited the June quarter with cash and cash equivalents of $1.3 billion compared with $1.64 billion at the end of 2024. NSC had a long-term debt of $16.5 billion at the second-quarter end compared with $16.6 billion at the 2024-end.
2025 Guidance Tweaked
For 2025, NSC now expects year-over-year revenue growth in the 2-3% band (previous expectation was for 3% growth). Adjusted operating ratio improvement is now expected to be in the band of 100-150 basis points year over year compared with the 150-basis-point growth anticipated earlier. With the cost-control initiatives yielding strong results, NSC now expects productivity savings in 2025 to exceed $175 million (previous expectation was above $150 million).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Norfolk Southern has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.
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. It's no surprise Norfolk Southern has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Norfolk Southern is part of the Zacks Transportation - Rail industry. Over the past month, Canadian National (CNI - Free Report) , a stock from the same industry, has gained 3.2%. The company reported its results for the quarter ended June 2025 more than a month ago.
CN reported revenues of $3.09 billion in the last reported quarter, representing a year-over-year change of -2.4%. EPS of $1.35 for the same period compares with $1.35 a year ago.
For the current quarter, CN is expected to post earnings of $1.40 per share, indicating a change of +11.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CN. Also, the stock has a VGM Score of D.
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Why Is Norfolk Southern (NSC) Down 2.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Norfolk Southern (NSC - Free Report) . Shares have lost about 2.4% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Norfolk Southern due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Norfolk Southern Corporation before we dive into how investors and analysts have reacted as of late.
Earnings Beat at Norfolk Southern in Q2
NSC's second-quarter 2025 earnings (excluding 12 cents from non-recurring items) of $3.29 per share beat the Zacks Consensus Estimate of $3.27 and increased 7.5% year over year, owing to lower costs.
Railway operating revenues were $3.11 billion in the quarter under review, missing the Zacks Consensus Estimate of $3.13 billion. The top line increased 2.2% year over year, driven by the 3% rise in overall volumes. Total revenue per unit dipped 1% year over year. Income from railway operations rose 4% year over year to $1.17 billion. Railway operating expenses inched up 1% on a year-over-year basis to $1.9 billion, primarily due to a double-digit increase in expenses on minerals and other items.
Q2 Segmental Performance
Merchandise revenues increased 4% year over year to $2 billion. Revenue per unit decreased 1% year over year.
Intermodal’s revenues were flat year over year at $743 million. While segmental volumes increased 1%, revenue per unit inched down 1% year over year.
Coal revenues were $395 million, down 1% year over year. Coal volumes increased 12% year over year. Revenue per unit declined 11% in the reported quarter.
Liquidity
Norfolk Southern, currently carrying a Zacks Rank#4 (Sell), exited the June quarter with cash and cash equivalents of $1.3 billion compared with $1.64 billion at the end of 2024. NSC had a long-term debt of $16.5 billion at the second-quarter end compared with $16.6 billion at the 2024-end.
2025 Guidance Tweaked
For 2025, NSC now expects year-over-year revenue growth in the 2-3% band (previous expectation was for 3% growth). Adjusted operating ratio improvement is now expected to be in the band of 100-150 basis points year over year compared with the 150-basis-point growth anticipated earlier. With the cost-control initiatives yielding strong results, NSC now expects productivity savings in 2025 to exceed $175 million (previous expectation was above $150 million).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Norfolk Southern has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.
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. It's no surprise Norfolk Southern has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Norfolk Southern is part of the Zacks Transportation - Rail industry. Over the past month, Canadian National (CNI - Free Report) , a stock from the same industry, has gained 3.2%. The company reported its results for the quarter ended June 2025 more than a month ago.
CN reported revenues of $3.09 billion in the last reported quarter, representing a year-over-year change of -2.4%. EPS of $1.35 for the same period compares with $1.35 a year ago.
For the current quarter, CN is expected to post earnings of $1.40 per share, indicating a change of +11.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CN. Also, the stock has a VGM Score of D.