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Norfolk Southern (NSC) Beats on Q2 Earnings, Revenues Miss

Leading U.S. railroad operator Norfolk Southern Corp. NSC reported second-quarter 2017 earnings of $1.71 per share that beat the Zacks Consensus Estimate of $1.64.

The bottom line also rallied 25.74% year over year, aided by a rise in income from railway operations and a record operating ratio. 

Railway operating revenues in second-quarter 2017 came in at $2,637 million, marginally below the Zacks Consensus Estimate of $2,641.7 million. Revenue however improved 7.46% on a year-over-year basis. Volume growth drove the top line.

Income from railway operations climbed 15% year over year to $888 million. Operating expenses increased 4% year over year to $1,749 million. Operating ratio (defined as operating expenses as a percentage of revenues) in the reported quarter was 66.3% compared with 68.6% a year ago. The company raised its share repurchase guidance by 25% to $1 billion for 2017.

The earnings report however failed to find favor with investors. Consequently, the stock lost value in early trading.

Segments

On a year-over-year basis, coal revenues surged 31.8% to $447 million.

Merchandise revenues inched up 1.3% year over year to $1,597 million.

Intermodal revenues rose 10.2% year over year to $593 million.

Norfolk Southern Corporation Price, Consensus and EPS Surprise

 

Norfolk Souther Corporation Price, Consensus and EPS Surprise | Norfolk Souther Corporation Quote

Liquidity

Norfolk Southern exited the second quarter with cash and cash equivalents of $642 million compared with $956 million at the end of 2016. The company had long-term debt of $9,273 million, compared with $9,562 million at the end of 2016. 

Upcoming Releases

Investors interested in the broader transportation space are keenly waiting for second-quarter earnings reports from key players like American Airlines Group, Inc. AAL, Copa Holdings, S.A. CPA and Air Lease Corp. AL. While American Airlines is scheduled to report second-quarter results on Jul 28, Copa Holdings and Air Lease will report the same on Aug 9 and Aug 3, respectively.

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Norfolk Souther Corporation (NSC): Free Stock Analysis Report
 
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