Norfolk Southern (NSC) Q3 Earnings & Revenues Top, Rise Y/Y

Norfolk Southern Corporation NSC reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.

Quarterly earnings of $4.10 per share surpassed the Zacks Consensus Estimate of $3.64. Moreover, the bottom line improved 34% year over year.

Railway operating revenues in the quarter under review came in at $3,343 million, outperforming the Zacks Consensus Estimate of $3,219.6 million. The top line increased 17.22% year over year, with all key segments, including merchandise, intermodal and coal registering improvement in revenues. Revenue per unit rose 20% year over year, driven by higher fuel surcharges and pricing.Total volumes declined 2% year over year due to network challenges.

Income from railway operations climbed 12% year over year to $1,271 million. Railway operating expenses shot up 21% on a year-over-year basis to $2,071 million, primarily due to higher fuel expenses and purchased services. Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) deteriorated to 62% in the second quarter from 60.2% in the year-ago quarter due to higher costs.

In the first nine months of 2022, NSC rewarded its shareholders with $3,165 million through dividends ($881 million) and share repurchases ($2,284 million).

Segmental Performance

Merchandise revenues climbed 13% year over year to $1,930 million. Volumes declined 2% while revenue per unit ascended 15% year over year.

Intermodal revenues augmented 16% year over year to $942 million. While segmental volumes decreased 5%, revenue per unit ascended 22%.

Coal revenues totaled $471 million, up 43% year over year. Coal volumes increased 14%. Revenue per unit jumped 25% in the reported quarter.

Liquidity

Norfolk Southern exited the third quarter with cash and cash equivalents of $1,214 million compared with $1,571 million at the end of March 2022. Norfolk Southern had a long-term debt of $14,463 million at the end of the September quarter compared with $13,691 million at March 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.

Performance of Other Transportation Companies

Delta Air Lines’ DAL third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss. Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents 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 $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by high air-travel demand, total revenues increased more than 52% on a year-over-year basis.

United Airlines’ UAL third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. An uptick in air-travel demand aided results.

In the year-ago quarter, UAL incurred a loss of $1.02 per share when air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable quarter at UAL since the onset of the pandemic.

Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to upbeat air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.2% from third-quarter 2019 (pre-coronavirus) levels.

J.B. Hunt Transport Services, Inc. JBHT reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate. JBHT’s quarterly earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.45 and improved 36.7% year over year.

JBHT’s operating revenues of $3,838.3 million also outperformed the Zacks Consensus Estimate of $3803.4 million. The top line jumped 22.1% year over year on the back of strength across Dedicated Contract Services, Intermodal, and Truckload and Final Mile Services segments. Total operating revenues, excluding fuel surcharges, rose 12.4% year over year.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.