Norfolk Southern Corporation NSC reported second-quarter 2018 earnings of $2.50 per share, surpassing the Zacks Consensus Estimate of $2.31. The bottom line also improved 46% on a year-over-year basis. Results were aided by a low effective tax rate.

Railway operating revenues in the quarter under review grossed $2,898 million, above the Zacks Consensus Estimate of $2,853.6 million. The top line also rose 10% on a year-over-year basis. Overall, volumes expanded 6% on the back of growth across all three segments.
 
Income from railway operations climbed 18% year over year to $1 billion. Operating expenses increased 6% year over year to $1.9 billion. Railway operating expenses rose due to higher fuel prices and incentive compensation as well as costs related to overall lower network velocity.

Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) in the second quarter of 2018 came in at 64.6% compared with 66.3% in the second quarter of 2017.

Norfolk Southern Corporation Price, Consensus and EPS Surprise

 

Norfolk Southern Corporation Price, Consensus and EPS Surprise | Norfolk Southern Corporation Quote

Segmental Revenues

On a year-over-year basis, coal revenues increased 4.3% to $466 million.

Merchandise revenues gained 7.6% year over year to $1,718 million.

Intermodal revenues rose 20.4% year over year to $714 million.

Liquidity

Norfolk Southern exited the second quarter with cash and cash equivalents of $430 million compared with $690 million at the end of 2017. The company had long-term debt of $9,146 million compared with $9,136 million as of Dec 31, 2017.

Zacks Rank & Other Key Picks

Norfolk Southern’s carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader Transportation sector include CSX Corporation CSX, GATX Corporation GATX and Expeditors International of Washington, Inc. EXPD. While CSX sports a Zacks Rank #1 (Strong Buy), GATX and Expeditors hold a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Each of the companies flaunts an impressive earnings history, having surpassed the Zacks Consensus Estimate in three of the past four quarters.

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