Norfolk Southern Corporation’s (NSC - Free Report) third-quarter 2019 earnings (excluding 9 cents from non-recurring items) of $2.58 per share surpassed the Zacks Consensus Estimate by a penny. Moreover, the bottom line improved 2.4% on a year-over-year basis owing to lower costs.
Railway operating revenues in the quarter under review came in at $2,841 million, surpassing the Zacks Consensus Estimate of $2,839.1 million. However, the top line declined approximately 4% year over year due to disappointing revenues at the coal and intermodal units. Overall volumes decreased 6%.
The sluggish volumes and the year-over-year revenue fall displeased investors. Consequently, shares of the company were down in early trading.
Income from railway operations declined 2% year over year to $996 million. Operating expenses declined 4% on a year-over-year basis to $1,845 million, primarily owing to lower fuel costs as well as expenses related to purchased services and rents. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) in the third quarter improved 50 basis points to 64.9% in the reported quarter. Notably, lower the value of the metric the better.