Norfolk Southern (NSC) Q1 Earnings & Revenues Beat, Rise Y/Y
Norfolk Southern Corporation NSC reported better-than-expected first-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Quarterly earnings (excluding $1.28 from non-recurring items) of $3.32 per share beat the Zacks Consensus Estimate of $3.15 and improved 13.3% year over year.
Norfolk Southern Corporation Price, Consensus and EPS Surprise
Norfolk Southern Corporation price-consensus-eps-surprise-chart | Norfolk Southern Corporation Quote
Railway operating revenues were $3,132 million in the quarter under review, beating the Zacks Consensus Estimate of $3,099.8 million. The top line increased 7.5% year over year, with all key segments, including Merchandise and coal, registering improvements in revenues. Total revenue per unit rose 8% year over year, driven by higher fuel surcharges and pricing. Income from railway operations climbed 1% year over year to $1,098 million.
Railway operating expenses shot up 11% on a year-over-year basis to $2,034 million primarily due to higher fuel expenses and cost on purchased services. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) improved to 64.9% in the first quarter from 62.8% in the year-ago quarter due to higher costs.
In the first three months of 2023, NSC paid out dividends worth $307 million and repurchased shares worth $163 million. The free cash flow increased $745 million.
Segmental Performance
Merchandise’s revenues climbed 12% year over year to $1,878 million. Volumes grew 5%, whereas revenue per unit ascended 7% year over year.
Intermodal’s revenues fell 5% year over year to $814 million. While segmental volumes decreased 4%, revenue per unit ascended 1%.
Coal’s revenues totaled $440 million, up 13% year over year. Coal volumes increased 5%. Revenue per unit jumped 8% in the reported quarter.
Liquidity
Norfolk Southern exited first-quarter 2023 with cash and cash equivalents of $552 million compared with $456 million at the end of 2022. NSC had a long-term debt of $14,585 million at the end of the March-end quarter compared with $14,479 million at 2022 end.
Currently, Norfolk Southern carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q1 Performance of Some Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s JBHT first-quarter 2023 earnings of $1.89 per share missed the Zacks Consensus Estimate of $2.04 and declined 17.5% year over year.
JBHT’s total operating revenues of $3,229.58 million lagged the Zacks Consensus Estimate of $3,434.4 million and fell 7.4% year over year. The downfall was due to declines in the volume of 25% in Integrated Capacity Solutions (ICS), 5% in Intermodal (JBI) and 17% in Final Mile Services (FMS). A decline of 17% in revenue per load in Truckload ("JBT") added to the woes. Revenue declines in ICS, JBI, FMS and JBT were partially offset by Dedicated Contract Services revenue growth of 13%. JBHT’s total operating revenues, excluding fuel surcharges, decreased 10.2% year over year.
Delta Air Lines’ DAL first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel price and unfavorable weather conditions led to this downtick. DAL reported a loss of $1.23 per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $12,759 million, which missed the Zacks Consensus Estimate of $12,767.4 million. Driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.
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