Norfolk Southern (NSC) Q2 Earnings Beat, Revenues Up 34% Y/Y

Norfolk Southern Corporation’s NSC second-quarter 2021 earnings of $3.28 per share surpassed the Zacks Consensus Estimate of $2.94. Moreover, the bottom line skyrocketed more than 100% year over year on higher revenues.

Railway operating revenues in the quarter under review came in at $2,799 million, outperforming the Zacks Consensus Estimate of $2,751.3 million. The top line increased 34% year over year owing to 25% rise in volumes and a 7% increase in revenue per unit. Second-quarter results reflect significant recovery from the year-ago period when coronavirus-led woes dented volumes.

Income from railway operations surged 91% year over year to $1,167 million. Railway operating expenses increased 11% on a year-over-year basis to $1,632 million, mainly due to significant rise in fuel costs. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues), on a reported basis, improved to 58.3% in the second quarter from 70.7% in the year-ago quarter. With respect to this metric, lower the value, the better.

Norfolk Southern Corporation Price, Consensus and EPS Surprise

Norfolk Southern Corporation Price, Consensus and EPS Surprise

Norfolk Southern Corporation price-consensus-eps-surprise-chart | Norfolk Southern Corporation Quote

Segmental Performance

Coal revenues totaled $318 million, up 52% year over year. Coal volumes rose 55%. However, revenue per unit dipped 1% in the reported quarter.

Merchandise revenues jumped 29% year over year to $1,680 million. Volumes also increased 29% while revenue per unit was flat year over year.

Intermodal revenues augmented 41% year over year to $801 million. While segmental volumes rose 20%, revenue per unit ascended 17%.

Liquidity & Share Buyback

This Zacks Rank #3 (Hold) company exited the second quarter with cash and cash equivalents of $1,670 million compared with $1,115 million at the end of 2020. The company had long-term debt of $12,669 million at the end of the reported quarter compared with $12,102 million at December 2020-end.

During the first half of 2021, the company repurchased and retired 5.7 million and 3.9 million shares for $1.5 billion and $669 million, respectively.

Sectorial Snapshot

Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector.

Knight-Swift Transportation Holdings KNX, carrying a Zacks Rank #2 (Buy), reported second-quarter 2021 earnings (excluding 6 cents from non-recurring items) of 98 cents per share, surpassing the Zacks Consensus Estimate of 87 cents. Total revenues of $1,315.7 million also outperformed the Zacks Consensus Estimate of $1,300.8 million. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

United Parcel Service UPS, carrying a Zacks Rank #3, reported second-quarter 2021 earnings (excluding a penny from non-recurring items) of $3.06 per share, beating the Zacks Consensus Estimate of $2.75. Quarterly revenues of $23,424 million also outperformed the Zacks Consensus Estimate of $23,085.4 million.

Ryanair Holdings RYAAY, carrying a Zacks Rank #4 (Sell), incurred a loss of $1.46 per share in the first quarter of fiscal 2022 (ended Jun 30, 2021), narrower than the Zacks Consensus Estimate of a loss of $1.50. Quarterly revenues of $446.4 million fell short of the Zacks Consensus Estimate of $459 million.

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