Norfolk Southern Second Quarter Earnings Sneak Peek

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S&P 500 (NYSE:SPY) component Norfolk Southern (NYSE:NSC) will unveil its latest earnings on Tuesday, July 24, 2012. Norfolk Southern is engaged in rail transportation of raw materials, intermediate products, and finished goods.

Norfolk Southern Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.53 per share, a rise of 10.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from $1.52. Between one and three months ago, the average estimate was unchanged. It has risen during the last month. Analysts are projecting profit to rise by 12.6% compared to last year’s $5.90.

Past Earnings Performance: The company topped estimates last quarter after missing forecasts the quarter prior. In the first quarter, it reported net income of $1.23 per share against a mean estimate of profit of $1.12 per share. In the fourth quarter of the last fiscal year, it missed forecasts by one cent.

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A Look Back: In the first quarter, profit rose 26.2% to $410 million ($1.23 a share) from $325 million (90 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 6.5% to $2.79 billion from $2.62 billion.

Stock Price Performance: Between May 21, 2012 and July 18, 2012, the stock price had risen $6.39 (9.5%), from $67.41 to $73.80. The stock price saw one of its best stretches over the last year between July 10, 2012 and July 17, 2012, when shares rose for six straight days, increasing 4.1% (+$2.90) over that span. It saw one of its worst periods between January 19, 2012 and January 31, 2012 when shares fell for nine straight days, dropping 7.4% (-$5.74) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.21 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.03 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in current assets. Current assets increased 33.2% to $2.33 billion while liabilities rose by 13.6% to $1.93 billion.

Key Stats:

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 24.5% in the third quarter of the last fiscal year and 19.4% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 17.9% in the second quarter of the last fiscal year, 17.6% in the third quarter of the last fiscal year and 16.9% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Wall St. Revenue Expectations: Analysts are projecting a rise of 2.8% in revenue from the year-earlier quarter to $2.95 billion.

Analyst Ratings: With 15 analysts rating the stock a buy, one rating it a sell and eight rating the stock a hold, there are indications of a bullish stance by analysts.

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

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