Back to top

Image: Bigstock

Norfolk Southern (NSC) to Post Q1 Earnings: What's in Store?

Read MoreHide Full Article

Norfolk Southern Corporation (NSC - Free Report) is scheduled to report first-quarter 2019 results on Apr 29, before market open.

The company has outperformed the Zacks Consensus Estimate for earnings per share in three of the last four quarters.

Norfolk Southern Corporation Price and EPS Surprise

 

Norfolk Southern Corporation Price and EPS Surprise

Norfolk Southern Corporation price-eps-surprise | Norfolk Southern Corporation Quote

The Zacks Consensus Estimate for first-quarter 2020 earnings has been revised downward 9.1% in the past 60 days.

Let’s discuss the factors that might have had an influence on the company’s performance in the quarter to be reported.

As witnessed in the past few quarters, freight volumes are likely to have been weak in the March-end quarter, impacting the company’s overall performance. Declining shipment volumes stemming from coronavirus-induced issues are likely to get reflected in the company’s first-quarter revenues. Also, supply chain disruptions are expected to have affected Norfolk Southern’s performance in to be reported quarter.

In the Merchandise segment, the automotive sub-group is expected to have performed poorly due to sluggish vehicle production in the United States. Moreover, lackluster utility coal shipments are expected to have exerted pressure on the Coal segment’s first-quarter performance. The Zacks Consensus Estimate for Coal and Merchandise volumes indicates 30% and 7.5% year-over-year decline, respectively. Also, the Zacks Consensus Estimate for overall volumes suggests a fall of 10.6% on a year-over-year basis.

However, the bottom line is likely to have been driven by the company’s cost-control efforts. With reduced costs, the operating ratio (operating expenses as a percentage of revenues) is anticipated to have improved during the first quarter. A low value of this key metric bodes well.

What Does the Zacks Model Say?

Our proven model does not predict an earnings beat for Norfolk Southern this time around. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP:  Norfolk Southern has an Earnings ESP of +0.02%. 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 #4 (Sell), currently.

Highlights of Q4 Earnings

In the last reported quarter, Norfolk Southern’s earnings of $2.55 per share surpassed the Zacks Consensus Estimate of $2.29. However, the bottom line dropped approximately 1% year over year. Quarterly revenues of $2,690 million missed the consensus mark of $2,690.3 million and declined 7.1% on a  year-over-year basis.

Stocks to Consider

Here are some other stocks from the broader Zacks Transportation sector that investors may consider, which per our model, have the right combination of elements to post an earnings beat.

Southwest Airlines (LUV - Free Report) has an Earnings ESP of +18.06% and currently carries a Zacks Rank of 3. The carrier is scheduled to report first-quarter 2020 earnings on Apr 28.

Werner Enterprises, Inc. (WERN - Free Report) has an Earnings ESP of +12.50% and currently has a Zacks Rank of 3. The company is scheduled to report first-quarter 2020 earnings on Apr 28.

Trinity Industries, Inc. (TRN - Free Report) has an Earnings ESP of +7.14% and currently has a Zacks Rank of 3. The company is scheduled to report first-quarter 2020 results on Apr 29.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>