Norfolk Southern Earnings: Four Quarters of Rising Profit Now Broken

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S&P 500 (NYSE:SPY) component Norfolk Southern Corporation (NYSE:NSC) reported its results for the second quarter. Norfolk Southern is engaged in rail transportation of raw materials, intermediate products, and finished goods.

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Norfolk Southern Corporation Earnings Cheat Sheet

Results: Net income for the transportation-rail fell to $524 million ($1.60 per share) vs. $557 million ($1.56 per share) a year earlier. This is a decline of 5.9% from the year-earlier quarter.

Revenue: Rose 0.3% to $2.87 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Norfolk Southern Corporation beat the mean analyst estimate of $1.53 per share. It fell short of the average revenue estimate of $2.95 billion.

Quoting Management: “In the second quarter, Norfolk Southern continued to deliver outstanding results. Our income from operations, diluted earnings per share and improved operating ratio all set records, despite the slow economic recovery and softness in our coal franchise,” said CEO Wick Moorman. “Our railroad continues to operate extremely well, and that enables us to control costs and operate efficiently while providing high levels of service for our customers.”

Key Stats:

Last quarter’s profit decrease ends a four-quarter streak of profit increases. In the first quarter, net income rose 26.2% from the year earlier, while the figure increased 19.4% in the fourth quarter of the last fiscal year, 24.5% in the third quarter of the last fiscal year and 42.1% in the second quarter of the last fiscal year.

Revenue has increased for four quarters in a row. Revenue increased 6.5% to $2.79 billion in the first quarter. The figure rose 16.9% in the fourth quarter of the last fiscal year from the year earlier and climbed 17.6% in the third quarter of the last fiscal year from the year-ago quarter.

The company has beaten estiamtes for two quarters in a row. In the first quarter, it topped expectations with net income of $1.23 versus a mean estimate of net income of $1.12 per share.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from $1.62 a share to $1.64 over the last ninety days. The average estimate for the fiscal year is $5.90 per share, a rise from $5.77 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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