Norfolk Southern (NSC) Tops Q3 Earnings, Sales Estimates

Leading U.S. railroad operator Norfolk Southern Corp. (NYSE:NSC) reported third-quarter 2017 earnings of $1.75 per share, surpassing the Zacks Consensus Estimate of $1.64. The bottom line also expanded 12.9% on a year-over-year basis. Results were aided by higher revenues.

Railway operating revenues in third-quarter 2017 came in at $2,670 million, above the Zacks Consensus Estimate of $2,630.3 million. The bottom line also improved 5.8% on a year-over-year basis. Overall volumes grew 4% on the back of impressive performances at key segments like coal and intermodal.

Income from railway operations climbed 11% year over year to $911 million. Operating expenses increased 3% year over year to $1,759 million. Markedly, Norfolk Southern revealed that operating ratio (operating expenses as a percentage of revenues) in the reported quarter improved to 65.9% from 67.5% in the third quarter of 2016. Operating ratio came in at 67.4% on a year-to-date basis.

Segmental Revenues

On a year-over-year basis, coal revenues surged 13.1% to $449 million.

Merchandise revenues increased 3.1% year over year to $1,600 million.

Intermodal revenues rose 8% year over year to $621 million.

Liquidity

This Zacks Rank #3 (Hold) exited the third quarter with cash and cash equivalents of $724 million compared with $956 million at the end of 2016. The company had long-term debt of $9,280 million compared with $9,562 million at the end of 2016. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. (NASDAQ:AAL) , Southwest Airlines Co. (NYSE:LUV) and Union Pacific Corp. (NYSE:UNP) . All are scheduled to report their respective earnings numbers on Oct 26.

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