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Norfolk Southern (NSC) Q1 Earnings Beat, Revenues Fall Y/Y
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Norfolk Southern Corporation’s (NSC - Free Report) first-quarter 2020 earnings of $2.58 per share (excluding $1.11 from non-recurring items) surpassed the Zacks Consensus Estimate of $2.19. Moreover, the bottom line inched up 2.8% on a year-over-year basis.
Railway operating revenues in the quarter under review came in at $2,625 million, edging past the Zacks Consensus Estimate of $2,558 million. The top line however declined 7.8% year over year due to an 11% drop in total volumes owing to weak energy prices and the COVID-19 pandemic.
Income from railway operations plunged 41.2% year over year to $568 million. Operating expenses increased 9.8% on a year-over-year basis to $2,057 million. Norfolk Southern’s adjusted operating ratio (operating expenses as a percentage of revenues) in the first quarterimproved 230 basis to 63.7%. With respect to this metric, the lower the value, the better.
Norfolk Southern Corporation Price, Consensus and EPS Surprise
On a year-over-year basis, coal revenues totaled $298 million, down 31.5% year over year. Coal volumes contracted 31%. Revenue per unit dropped 1% in the reported quarter.
Merchandise revenues declined 0.8% to $1,672 million and volumes fell 5%. Revenue per unit improved 4% for the segment.
Intermodal revenues reduced 8.9% year over year to $655 million. Segmental volumes also declined 11%. Revenue per unit rose 2% on a year-over-year basis.
Liquidity & Share Buyback
This Zacks Rank #4 (Sell) company exited the first quarter with cash and cash equivalents of $608 million compared with $580 million at the end of 2019. The company had long-term debt of $11,807 million compared with $11,880 million at 2019-end.
The company’s board cleared a quarterly cash dividend of 94 cents per share, payable to shareholders on Jun 10 of record as of May 8. It paid out dividends for 151 consecutive quarters.
Outlook
Norfolk Southern’s volumes have declined 30% quarter-to-date. Consequently, revenues are anticipated to quite low in the second quarter.
The company has withdrawn its guidance for revenues and operating ratio for 2020 considering the uncertainty surrounding the coronavirus pandemic.
Delta incurred a loss of 51 cents (excluding 33 cents from non-recurring items) in the March quarter, narrower than the Zacks Consensus Estimate of a loss of 72 cents. In the year-ago quarter, the company reported earnings (on an adjusted basis) of 96 cents per share. Total revenues of $8,592 million lagged the Zacks Consensus Estimate of $9,637.5 million and also declined 18% year over year.
CSX reported first-quarter 2020 earnings of $1 per share, beating the Zacks Consensus Estimate of 92 cents. However, the bottom line slipped approximately 2% year over year on a 5% drop in revenues. Total revenues of $2,855 million lagged the consensus estimate of $2,877 million owing to lower coal and other revenues.
Union Pacific’s first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Operating revenues of $5,229 million also beat the consensus mark of $5,105.9 million. While the bottom line improved 11.4% on a year-over-year basis, primarily on low costs, the top line declined 3% owing to sluggish freight revenues (down 3%).
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Norfolk Southern (NSC) Q1 Earnings Beat, Revenues Fall Y/Y
Norfolk Southern Corporation’s (NSC - Free Report) first-quarter 2020 earnings of $2.58 per share (excluding $1.11 from non-recurring items) surpassed the Zacks Consensus Estimate of $2.19. Moreover, the bottom line inched up 2.8% on a year-over-year basis.
Railway operating revenues in the quarter under review came in at $2,625 million, edging past the Zacks Consensus Estimate of $2,558 million. The top line however declined 7.8% year over year due to an 11% drop in total volumes owing to weak energy prices and the COVID-19 pandemic.
Income from railway operations plunged 41.2% year over year to $568 million. Operating expenses increased 9.8% on a year-over-year basis to $2,057 million. Norfolk Southern’s adjusted operating ratio (operating expenses as a percentage of revenues) in the first quarterimproved 230 basis to 63.7%. With respect to this metric, the lower the value, the better.
Norfolk Southern Corporation Price, Consensus and EPS Surprise
Norfolk Southern Corporation price-consensus-eps-surprise-chart | Norfolk Southern Corporation Quote
Segmental Performance
On a year-over-year basis, coal revenues totaled $298 million, down 31.5% year over year. Coal volumes contracted 31%. Revenue per unit dropped 1% in the reported quarter.
Merchandise revenues declined 0.8% to $1,672 million and volumes fell 5%. Revenue per unit improved 4% for the segment.
Intermodal revenues reduced 8.9% year over year to $655 million. Segmental volumes also declined 11%. Revenue per unit rose 2% on a year-over-year basis.
Liquidity & Share Buyback
This Zacks Rank #4 (Sell) company exited the first quarter with cash and cash equivalents of $608 million compared with $580 million at the end of 2019. The company had long-term debt of $11,807 million compared with $11,880 million at 2019-end.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dividend Update
The company’s board cleared a quarterly cash dividend of 94 cents per share, payable to shareholders on Jun 10 of record as of May 8. It paid out dividends for 151 consecutive quarters.
Outlook
Norfolk Southern’s volumes have declined 30% quarter-to-date. Consequently, revenues are anticipated to quite low in the second quarter.
The company has withdrawn its guidance for revenues and operating ratio for 2020 considering the uncertainty surrounding the coronavirus pandemic.
Performance of Other Transportation Stocks
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , CSX Corp. (CSX - Free Report) and Union Pacific Corp. (UNP - Free Report) reported earnings numbers last week.
Delta incurred a loss of 51 cents (excluding 33 cents from non-recurring items) in the March quarter, narrower than the Zacks Consensus Estimate of a loss of 72 cents. In the year-ago quarter, the company reported earnings (on an adjusted basis) of 96 cents per share. Total revenues of $8,592 million lagged the Zacks Consensus Estimate of $9,637.5 million and also declined 18% year over year.
CSX reported first-quarter 2020 earnings of $1 per share, beating the Zacks Consensus Estimate of 92 cents. However, the bottom line slipped approximately 2% year over year on a 5% drop in revenues. Total revenues of $2,855 million lagged the consensus estimate of $2,877 million owing to lower coal and other revenues.
Union Pacific’s first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Operating revenues of $5,229 million also beat the consensus mark of $5,105.9 million. While the bottom line improved 11.4% on a year-over-year basis, primarily on low costs, the top line declined 3% owing to sluggish freight revenues (down 3%).
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>